Canadian midstream company Enbridge has closed its planned agreement with Pacific Energy to buy a 30% ownership stake in the US$5.1 billion Woodfibre LNG project, which is under preliminary construction on the west coast of Canada.
Enbridge in late July said it had agreed to join the Woodfibre LNG project, a 2.1 million tonnes per annum liquefied natural gas export facility to be built near Squamish, British Columbia.
The project is underpinned by two 15-year offtake agreements with UK supermajor BP that accounts for 70% of the nameplate capacity, with additional commitments in development for up to 90%.
US contractor McDermott International has the engineering, procurement and construction contract for Woodfibre LNG, which is expected to start up in 2027.
The facility is largely intended to serve customers in the Far East. As part of the agreement, Enbridge will contribute US$1.5 billion to Woodfibre’s construction and operation.
Pacific Energy retains the remaining 70% stake in the project.
Capital for the project includes a contribution to help build the expansion of FortisBC’s Eagle Mountain pipeline system which will connect the Woodfibre LNG facility through the FortisBC system to Enbridge’s T-South natural gas transmission system.
“Pacific Energy and Enbridge will each make pro-rata contributions during construction through a combination of expected asset level financing and equity investments. In exchange for its capital contribution, Enbridge will receive a preferred equity interest that provides predictable future cash flows,” Enbridge said on Wednesday.
“The partners will jointly participate in the project’s execution and governance of ongoing operations while Pacific Energy retains responsibility for daily operations.”
Pacific Energy has said the utilisation of electric motor drives using hydroelectric power will make Woodfibre LNG one of the world’s LNG export facilities with the lowest emissions.
Woodfibre LNG is the first project approved under the Canadian federal government’s ‘five principles’for environmental assessment and has received all major federal, provincial and First Nations’ approvals.
Enbridge on Wednesday added the project remains “on track” to meet the previously announced in-service date.