Woodfibre President Says Third BP Agreement Shows LNG Importance And Demand

Asked about the significance of Woodfibre LNG’s third LNG offtake sales and purchase agreement with bp Gas Marketing Limited (BPGM), president Christine Kennedy says it shows how well positioned Canada and British Columbia are in terms of the energy global transition, and how important LNG is as a sector.

“The big part about it is that it demonstrates that there's demand for low carbon energy today and well into the future,” Kennedy said in an interview on the agreement.

It was announced on Sept. 5 that BPGM, a subsidiary of BP plc, has now agreed to purchase a total of 1.95 million tonnes per annum of LNG offtake from Squamish, B.C.-based Woodfibre when it commences commercial operations, due to begin in 2027. 

The first two offtake agreements between Woodfibre and BPGM were signed in 2019 and 2021 respectively, with all three agreements running for 15 years.

“The whole world is seeking natural gas, LNG, to supply both energy security and that energy transition, and this reinforces that there's demand for that, particularly from jurisdictions with strong regulatory environments where the source of gas is understood, the regulations that surround that sourcing are understood,” Kennedy said.

“All of those things continue to be important in the marketplace. I'd just say again that it shows how much importance and demand there is in the market for LNG.”

Woodfibre has also been receiving inquiries from other potential LNG customers, she added.

“For example, the LNG2023 show was here in Vancouver [in July], and our commercial people were spending a whole lot of time with interested customers from around the world, looking to where gas was going to come from,” Kennedy said.

She said global customers are looking to suppliers for volume, and there is security in being in a relationship with a company like BPGM.

Woodfibre credibility reinforced

“And whenever there are those long-term purchase agreements in place, it reinforces the credibility of this project and others like it in that global LNG landscape and demonstrates just how important LNG is to that global energy transition.

“We're not going to get there without LNG. While renewables are making great strides, LNG, natural gas backstops renewables, while they scale up enough, and storage solutions scale up enough to provide reliable baseload power.”

As the Woodfibre facility is built and operations scale up, the sales agreement begins, Kennedy says, noting “it fits in, is well timed, is aligned with our plans.”

“Of course, we've been working with BP for many years, they're very aware of our business and the timeframe of our facility and operations plans and all,” she said.

“Purchase agreements are typically fairly standard things, I know, so there's not a lot more to say about them, but the really great thing is it just reinforces that demand is there, that Canada has an important role to play in this.

“Through all of the policy instruments of the provincial and federal government, and the regulatory environment that we work in, Canadian gas is in demand because it comes with those credentials of being sourced from [a] jurisdiction that has [an] extremely strong regulatory framework in place and strong government oversight.”

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