McDermott International has landed a major contract to build a breakthrough 2.1 million tonnes per annum liquefied natural gas plant in British Columbia, Canada that will be powered by hydroelectricity.
The US player has been handed an engineering, procurement, fabrication and construction contract by Woodfibre LNG for the facility that will be located in Squamish, just a few kilometres northeast of Vancouver.
While the project has yet to be sanctioned, the project proponent said the EPFC contract "is an important step in advancing detailed engineering and construction scheduling work in advance of... issuing a notice to proceed".
Privately-owned Woodfibre LNG, a subsidiary of Vancouver-based Pacific Energy Corporation (Canada) Limited, aims to bring the project online in the second half of 2027.
McDermott will manage onshore construction, leveraging Canadian-based contractors and commitments included in Woodfibre's impact benefit agreements with the indigenous Squamish Nation.
The EPFC contract commits McDermott to Woodfibre's hiring priority for qualified Squamish Nation members and local workers first, followed by British Columbians and then Canadians.
The aim, said Woodfibre, is to create "a safe, inclusive and respectful workplace" that brings benefits to the project's indigenous partners and community. It is estimated that 650 people will be working on the liquefaction site at peak construction.
Gas for the LNG plant will be sourced from British Columbia's prolific Montney play, with Asia being its prime export market region.
Woodfibre said the scheme will reduce global emissions by 3.5 million tonnes of carbon dioxide equivalent per annum, which equates to removing 5% of British Columbia's annual emissions.
It added that front-end engineering and facility design work is expected to result in a reduction of about 86% of CO2 emissions per tonne of LNG produced, compared with typical LNG facilities.
Woodfibre goes so far as to claim that the Squamish-based scheme "will be the cleanest liquefied natural gas export facility on earth, achieved through the adoption of a low-emission philosophy across every element of engineering and design".
The company explained that the facility will use hydroelectricity to power the main liquefaction process and will incorporate technology that enables liquefaction equipment to restart without flaring, a recycling system to use "boil-off" gas as well as additional transformers, switchgear and transmission lines.
Woodfibre LNG has two offtake agreements signed with BP, meaning over 70% of the plant's annual throughput has already been sold.
As well as building the LNG plant, McDermott will develop this advanced onshore gas processing and liquefaction facility with floating storage near Squamish, British Columbia, Canada. The strategy provides multiple pathways through design, execution and construction to reduce operational and project emissions.
Commenting on the deal with McDermott, Woodfibre president Christine Kennedy said: "We will be building the lowest-emission, most sustainable and innovative LNG export facility in the world. A particular point of pride for us is that the Squamish Nation serves as a full environmental regulator for this project."
"Serving as a unique example of economic reconciliation [with Canada's indigenous peoples], this is the first arrangement of its type for an LNG facility."
McDermott's chief operating officer Samik Mukherjee added: "This award is a tremendous opportunity to further demonstrate how our LNG and modularisation expertise enables a new generation of sustainable energy solutions."
In addition to the EPFC work, McDermott will also be responsible for commissioning and start-up services.
As well as the LNG plant, the development includes a 250,000 cubic metre floating storage facility.
Woodfibre said pre-installation work for the project is planned for early 2022 and will gradually ramp up through to September 2023, when major construction is targeted to begin.
Major works will continue through to substantial completion, which is expected in the third quarter of 2027, it said.
The project is called Woodfibre because it is being built on the site of a former wood pulp and paper mill on Howe Sound. The site is also a historic village used by the Squamish Nation for seasonal fishing.