Woodfibre LNG has signed an Engineering, Procurement, Fabrication, and Construction (EPFC) contract with McDermott International. 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.
Responsibly produced natural gas is a necessary part of making a successful global transition from heavy-emitting fuels to renewables. By harnessing the low-carbon gas resources of British Columbia's Montney region to replace coal-fired energy sources in Asia, Woodfibre LNG will reduce global emissions by 3.5 million tonnes CO2e per annum, equivalent to removing 5 percent 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, is expected to result in a reduction of approximately 86 percent of the carbon dioxide emissions per tonne of LNG produced.
Woodfibre LNG will be the cleanest liquefied natural gas export facility on earth, achieved through the adoption of a 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. Altogether, this results in the most groundbreaking technical achievement in the world of LNG, and sets a new standard for efficient plant design. This next-generation LNG production is in high demand. Woodfibre LNG has two offtake agreements signed with BP, meaning over 70 percent of Woodfibre's annual throughput has already been sold.
McDermott's industry-leading NetZero Modular LNG strategy has been fully utilized during the development of this advanced onshore gas processing and liquefaction facility with floating storage near Squamish, British Columbia, Canada. The strategy provides multiple pathways through design, execution and construction to reduce operational and project emissions.
"Our contract with McDermott is a positive step forward for this substantial piece of clean energy infrastructure," said Christine Kennedy, president of Woodfibre LNG. "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."
McDermott will manage onshore construction, leveraging Canadian-based contractors and commitments included in Woodfibre LNG's Impact Benefit Agreements with the S?wx_wú7mesh Úxwumixw (Squamish Nation). It is estimated that 650 people will be working 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 Chief Operating Officer 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.