Federal Environment Minister Catherine McKenna has given the thumbs up to the $1.7 billion Woodfibre LNG project in Squamish.
McKenna announced Friday (March 18) that the project has met federal environmental standards through a substituted environmental review.
Under substitution, the environmental assessment was conducted by the B.C. Environmental Assessment Office.
The project also went through a parallel assessment conducted by the Squamish First Nation. Woodfibre agreed to the 25 legally binding conditions set by the Squamish, including the negotiation of a benefits agreement.
In a press release, McKenna said her ministry has concluded that the project would not cause significant environmental impacts.
"The Woodfibre LNG project underwent a thorough, science-based environmental assessment that considered public and Indigenous input and views," McKenna said. "The process benefited from scientific and technical expertise, Indigenous traditional knowledge and constructive feedback that helped to inform my decision."
Byng Giraud, Woodfibre’s vice president of corporate affairs, told Business in Vancouver that there is still a lot of work to do before the company behind the project – Indonesia’s Pacific Oil and Gas – makes a final investment decision.
The company’s engineers will have to look at the conditions set out by B.C., the federal government and Squamish to finalize a design that meets all the conditions.
And while they’re at it, the company plans to take advantage of a slowdown in the oil and gas sectors to tweak the engineering in the hope of shaving a few dollars off the $1.7 billion project.
“We’re reviewing the entire project and looking for optimization,” Giraud said. “And it’s a good time to do it. With the engineering firms in the yards – and the suppliers – there’s a lot more availability right now because of the way the market is, so it’s a good time to optimize.”
The company also still needs to hammer out final offtake agreements. The company has memorandums of understanding signed with two customers in China. But the deals are not finalized yet, in part because of the volatility in oil and gas prices.
“They’re MOUs, they’re not final offers,” Giraud said. “With prices bouncing around on a daily basis, that takes a bit of effort, so our team in Asia has to nail down those offtake agreements.”
Of all the LNG projects proposed for B.C., Woodfibre LNG is one of the smallest. It would produce 2.1 million tonnes of liquefied natural gas per year – about one-ninth what the Pacific Northwest LNG plant would produce.
But even a small LNG project like Woodfibre requires a capital investment that is about on par with a pulp mill or very large mine.
Giraud said the company hopes to make a final investment decision this year.
