There likely won’t be a single liquefied natural gas (LNG) plant operating in B.C. by the next provincial election in 2017.
The government’s bet to be the first in a projected trillion-dollar new industry—Woodfibre LNG in Squamish, on the northwest shore of Howe Sound—will not be up and running in the first quarter of 2017 as previously planned.
Although Premier Christy Clark and her B.C. Liberals will not have much to show for their 2013 campaign promise of prosperity from LNG, they may not come totally empty-handed.
Woodfibre vice president of corporate affairs Byng Giraud expects that the project will be in “heavy construction” around 2017.
However, Giraud acknowledged that the original timeline of going into operation in early 2017 is “probably not achievable”.
That said, he noted that there’s a number of things going in favour of the planned $1.6-billion Woodfibre LNG plant.
For one, the site at the former Woodfibre pulp mill has a FortisBC gas pipeline, an electricity transmission line connected to the B.C. Hydro grid, and an existing deep-water port.
Secondly, according to Giraud, it will be easier for Woodfibre because of its small size to find a place in the international market for an amount of gas that’s not as huge as what may be required by bigger projects to be viable.
“This company also owns 35 percent of an import facility in mainland China. While we may not export to that facility, we have that option,” Giraud added.
Even with tough prices, Giraud said that Woodfibre will be able to move ahead because it’s relatively small compared to the other proposed projects. Pacific NorthWest LNG, for example, is an $11-billion project proposed in Prince Rupert by Malaysian state-owned Petronas.
According to Giraud, Woodfibre “doesn’t need the really high prices of last year to be successful”.
Explaining roughly how gas prices work, Giraud noted that these are one-16th the price of oil.
When oil was $100 a barrel last year, Giraud said that gas was $16 per MMBtu (one million British thermal units) in Japan.
With oil prices now around $50, that translates to $8 per MMBtu, which is “challenging for most export facilities”, Giraud explained.
“But that being said, if you’re looking at what people are projecting for the prices [of oil] over the medium term—and when I say the medium term, that’s the next three or four years—they’re looking at say more like $65, or $75, which takes us back to say $10 to $12, that makes these projects viable,” Giraud said.
Woodfibre LNG Limited, a subsidiary of Pacific Oil & Gas Limited, which is part of the Singapore-based RGE group of companies, has not made a final investment decision.
On January 13, the B.C. Environmental Assessment Office accepted Woodfibre LNG Limited’s application for an environmental assessment certificate.
According to Giraud, his company expects to secure an environmental assessment certificate around summer. It will make a final investment decision before the end of 2015.
Including Woodfibre and Pacific NorthWest, there are 19 LNG projects proposed in the province.
“Certainly we would be looking to be ahead of all the large projects,” Giraud said.
There are many skeptics who doubt whether anything solid will be realized from the B.C. Liberal government’s dream of an LNG industry.
“It really will depend on what happens with gas prices because it’s just so low right now,” Delena Angrignon told the Straight in a phone interview.
Angrignon is a cofounder of the My Sea to Sky, a local citizens’ group opposing the Woodfibre project.
“It would be incredible if they are ready to go in 2017,” Angrignon said.
Here in the Lower Mainland, the District of West Vancouver passed a resolution in 2014 calling on the federal government not to allow LNG tankers in the Howe Sound.
West Vancouver deputy chief administrative officer Brent Leigh indicated that district staff will submit a staff report to council this spring to provide further details about the Woodfibre project.
“That doesn’t necessarily mean that West Van would change its position on LNG or council would change its position,” Leigh told the Straight by phone.