Canada’s Enbridge Inc. said on July 29 it will invest $1.5 billion in the joint construction and operation of the Woodfibre LNG project with Pacific Energy Corp Ltd.
The move is Calgary, Alberta-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 U.S. Woodfibre is the second project to proceed, after the Shell-led 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 CA$450 million, or 22 Canadian cents per share, in the second quarter ended June 30, versus CA$1.39 billion, or 69 Canadian cents per share, a year earlier.
Earnings were hit by non-cash, net unrealized derivative losses of CA$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.
Enbridge shares were last up 0.3% at CA$57.61 on the Toronto Stock Exchange.
(US$1 = CA$1.2828)
Recommended Reading
Delek Logistics Offering Senior Notes to Pay Off Debt
2024-08-15 - Delek Logistics Partners and its subsidiary plan to use the net proceeds from the senior notes offering to pay off a portion of the outstanding borrowings from its credit facility.
Dividends Declared in the Week of July 22
2024-07-25 - Second quarter earnings are underway, and companies are declaring dividends.
Dividends Declared in the Week of Aug. 2
2024-08-02 - Here is a selection of dividends declared for the week of Aug. 2 for a selection of upstream, midstream and service & supply companies.
Upstream, Midstream Dividends Declared in the Week of July 8, 2024
2024-07-11 - Here is a selection of upstream and midstream dividends declared in the week of July 8.
Trans Mountain Appoints New CEO, President
2024-08-23 - Trans Mountain appointed Mark Maki to CEO, succeeding Dawn Farrell who will now be chairman of the board.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.