Inspectioneering
News

Enbridge To Invest $1.5 Billion in Pacific Energy’s Woodfibre LNG Project

Reuters, July 29, 2022
Reuters

Canada's Enbridge Inc said on Friday it will invest $1.5 billion in the joint construction and operation of the Woodfibre liquefied natural gas (LNG) project with Pacific Energy Corp Ltd.

The move is Calgary-based Enbridge's first investment in a liquefaction facility. It comes amid a boom in North American LNG exports and high demand for the fuel as Europe seeks to replace lost Russian gas supplies following Russia's invasion of Ukraine.

Woodfibre LNG, a subsidiary of Pacific Energy Ltd, gave notice to proceed with construction to its prime contractor in April. The 2.1 million tonne per year export facility in Squamish, British Columbia, will have 250,000 cubic meters of floating storage capacity and is expected to be completed in 2027.

Under the partnership, Enbridge will invest in a 30% ownership stake in the $5.1 billion project, with Pacific Energy retaining the remaining stake in the facility.

Woodfibre is smaller and lower-cost than many other LNG projects being developed in North America, making it an attractive investment for Enbridge as the company builds experience in the sector, Jason Kearns, Enbridge's director of business development, said in an interview.

"This one's very close to existing assets in a jurisdiction that we're very familiar with, and at a scale that makes sense for us as a first foray into this space," Kearns said.

The project is underpinned by two long-term offtake agreements with BP Gas Marketing Ltd for 15 years representing 70% of the capacity, with additional commitments in development for up to 90%, Enbridge and Pacific Energy said in a statement.

The LNG industry is growing much more slowly in Canada than in the United States. Woodfibre is the second project to proceed, after the Shell-led LNG Canada project in northern British Columbia, scheduled to start operating in 2025.

Enbridge also announced a further $2.1 billion in new projects, including expansions of its British Columbia and Texas gas pipeline systems.

The company reported earnings attributable to common shareholders of C$450 million, or 22 Canadian cents per share, in the second quarter ended June 30, versus C$1.39 billion, or 69 Canadian cents per share, a year earlier.

Earnings were hit by non-cash, net unrealized derivative losses of C$850 million.

On an adjusted basis, the company posted a profit of 67 Canadian cents per share, below analysts' estimate of 71 cents per share, according to Refinitiv data.


(Reporting by Arunima Kumar; Editing by Shailesh Kuber, Will Dunham and David Holmes)

Click here to read the full article from Reuters.

Copyright 2022 Thomson Reuters. Click for restrictions.

Comments and Discussion

There are no comments yet.

Add a Comment

Please log in or register to participate in comments and discussions.


Inspectioneering Journal

Explore over 20 years of articles written by our team of subject matter experts.

Company Directory

Find relevant products, services, and technologies.

Talent Solutions

Discover job opportunities that match your skillset.

Case Studies

Learn from the experience of others in the industry.

Integripedia

Inspectioneering's index of mechanical integrity topics – built by you.

Industry News

Stay up-to-date with the latest inspection and asset integrity management news.

Blog

Read short articles and insights authored by industry experts.

Expert Interviews

Inspectioneering's archive of interviews with industry subject matter experts.

Event Calendar

Find upcoming conferences, training sessions, online events, and more.

Downloads

Downloadable eBooks, Asset Intelligence Reports, checklists, white papers, and more.

Videos

Watch educational and informative videos directly related to your profession.

Acronyms

Commonly used asset integrity management and inspection acronyms.