UK (Common Wealth) _United Kingdom’s bp has signed its third long-term deal for liquefied natural gas (LNG) offtake from the Woodfibre LNG project in British Columbia, Canada. With the addition of a contract for 0.45 million tonnes of LNG per year (mtpa) on a free on board (FOB) basis for 15 years, all LNG production from the Woodfibre LNG export facility is now committed for sale to bp, with firm offtake totaling 1.95 mtpa and the remainder on a flexible offtake basis.
bp continues to seek opportunities along the gas value chain, seeing LNG as a critical component of the energy shift and its own pivot to become an integrated energy firm. As bp seeks to establish a 30 million-tonne LNG portfolio by 2030, the additional Canadian west coast supply source expands bp’s flexible, high-quality LNG portfolio and strengthens the company’s capacity to satisfy rising global natural gas demand.
Global demand for LNG is likely to expand as the world seeks secure, affordable, and low-carbon energy, and this additional Canadian supply source will strengthen BP’s supply positions in the Pacific area. We are excited to continue working together with Woodfibre LNG.
bp will ensure safe and dependable transportation of gas to the Woodfibre LNG export facility during the 15-year contract term, in addition to acquiring LNG offtake rights from the project.
According to Jonathan Shepard, VP worldwide LNG trading and origination at BP, “Global demand for LNG is expected to grow as the world seeks secure, affordable, and lower carbon energy,” and “this additional Canadian supply source will further enhance bp’s supply positions in the Pacific region.” We are excited to continue working together with Woodfibre LNG.
Woodfibre LNG, a Canadian LNG project, also stated it has signed a BP BP.L unit as its first customer, a critical step toward completing the export facility. Woodfibre said BP Gas Marketing Limited had contracted to acquire 0.75 million tonnes of LNG per year for 15 years beginning in 2023, when the British Columbia project is slated to begin operations.
It also stated that it was working on an arrangement with BP Canada to offer gas transportation and balancing services to ensure consistent delivery of gas to the Woodfibre LNG export facility over a 15-year period.
Several corporations in North America are planning LNG export facilities to profit on the gas made available by shale drilling technologies. It is critical to get committed, long-term buyers in order to finance and build such projects.
In October, Royal Dutch Shell RDSa.L approved its 14 mtpa project in Kitimat, northern British Columbia, kicking off a new cycle of projects to be built to satisfy an expected LNG shortage in the mid-2020s. However, the LNG Canada project is the only one in Canada that has reached the building stage.
Woodfibre LNG is a subsidiary of Pacific Oil & Gas, a Singaporean company owned by RGE. Pacific Oil & Gas owns and operates two LNG import facilities in China, in addition to various upstream and midstream oil and gas assets.
LNG generated on Canada’s west coast is likely to be marketed in Asia, which accounts for over 75% of worldwide demand. At least a half-dozen LNG export terminal projects are proposed in Canada, with more in the United States. The project will compress LNG using hydroelectric electricity, with the goal of being the first net zero LNG factory. The LNG facility will be housed in a decommissioned pulp mill.
The corporation stated that its conversations with the Squamish Nation were critical to its net zero initiatives. Woodfibre anticipates producing 83,374 tonnes of CO2e per year, with a CO2e intensity of 0.04 tonnes per tonne of LNG. In addition to its attempts to lessen its impact, the company will offset construction-related emissions through agreements with local projects.
