Woodfibre LNG signs second BP deal for British Columbia LNG plant

Canadian liquefied natural gas developer Woodfibre LNG said Thursday it signed a second agreement to sell LNG from its proposed export plant in British Columbia to a unit of oil major BP PLC.

That puts the plant a step closer to getting built in a market that has seen some cancellations in recent months but not many new projects.

Woodfibre said it will sell 0.75 MMtpy of LNG to BP's BP Gas Marketing Ltd over 15 years on a free on board (FOB) basis.

This latest agreement will increase BP's total LNG off-take to 1.5 MMtpy from Woodfibre's proposed 2.1-MMtpy plant.

One MTPA is equivalent to 0.13 billion cubic feet per day of natural gas.

Woodfibre is one of a dozen companies developing North American LNG export plants that have said they could make a final investment decision (FID) to start construction in 2021. Most of those projects were carried over from 2020 and several were also carried over from 2019.

Officials from Woodfibre were not immediately available for comment.

Woodfibre has said it could make a FID in 2021 that would put the plant on track to produce first LNG in 2025 at a cost of around C$1.6 B-C$1.8 B.

Over the past two months, Annova, another LNG developer, stopped work on its export plant in Brownsville, Texas, and Pembina paused development of its Jordan Cove project in Oregon.

Global LNG demand has increased every year since 2012 and hit record highs every year since 2015 mostly due to fast-rising demand in Asia.

But more recently, global gas buyers have been slow to sign new long-term contracts needed to finance the multibillion-dollar projects due to overbuilding of LNG export terminals in 2019 and coronavirus demand destruction and the collapse of gas prices in 2020.

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