Woodfibre LNG Awards Contract to McDermott

VANCOUVER and HOUSTON—Woodfibre LNG has signed an engineering, procurement, fabrication, and construction (EPFC) contract with McDermott International, the companies said on Nov. 23. The EPFC contract is an important step in advancing detailed engineering and construction scheduling work in advance of Woodfibre LNG issuing a notice to proceed.

“Our contract with McDermott is a positive step forward for this substantial piece of clean energy infrastructure,” said Christine Kennedy, president of Woodfibre LNG, in a released statement. “Together, we will be building the lowest-emission, most sustainable and innovative LNG export facility in the world. A particular point of pride for us is that the Squamish Nation serves as a full environmental regulator for this project. Serving as a unique example of economic reconciliation, this is the first arrangement of its type for an LNG facility.”

Harnessing the low-carbon gas resources of British Columbia’s Montney region to replace coal-fired energy sources in Asia will enable the Woodfibre plant to help reduce global emissions by 3.5 million tonnes CO_2e per annum, equivalent to removing 5% of B.C.’s annual emissions from the atmosphere each year. McDermott and Woodfibre’s collaboration on front-end engineering and facility design, relative to typical LNG facilities, will result in a reduction of about 86% in CO₂ emissions per tonne of LNG produced.

Woodfibre LNG said the plant will be the world’s cleanest LNG export facility  as a result of its low-emission philosophy across every element of engineering and design. The facility will use hydroelectricity for the main liquefaction process, and includes state of the art technology that enables liquefaction machinery to restart without flaring, a recycling system for “boil-off” gas, and additional transformers, switchgear and transmission lines. Woodfibre LNG has two offtake agreements signed with BP, meaning over 70% of Woodfibre’s annual throughput has already been sold.

McDermott’s NetZero Modular LNG strategy has been used during the development of the onshore gas processing and liquefaction facility with floating storage near Squamish, B.C. The strategy provides multiple pathways through design, execution and construction to reduce operational and project emissions.

McDermott will manage onshore construction, leveraging Canadian-based contractors and commitments included in Woodfibre LNG’s impact benefit agreements with the Squamish Nation. It is estimated that 650 will work on the Woodfibre LNG site at peak construction. The EPFC contract commits McDermott to Woodfibre LNG’s hiring priority for qualified Squamish Nation members and local workers first, followed by British Columbians and then Canadians. The joint priority is to create a safe, inclusive and respectful workplace that brings benefits to the project’s Indigenous partners and community.

“This is another example of how we are applying our unique integrated capabilities to solve challenges and create successes for our customers,” said Samik Mukherjee, executive vice president and COO of McDermott. “This award is a tremendous opportunity to further demonstrate how our LNG and modularization expertise enables a new generation of sustainable energy solutions.”

In addition to the EPFC work, McDermott will also be responsible for commissioning and start-up services. Pre-installation work for the project is planned for early 2022 and will gradually ramp up to September 2023, when major construction is targeted to begin. Major works will continue through to substantial completion, expected in Q3 2027.

The Woodfibre LNG project is located about 7 km from Squamish, midway between Vancouver and Whistler. The project is gearing up to start pre-construction of a single train export facility on the previous Woodfibre pulp mill site. The facility will have a storage capacity of 250,000 cubic meters and produce approximately 2.1 mtpa of LNG using 100% renewable hydroelectric technology.