Woodfibre LNG, British Columbia sign deal on natgas export proposal

VANCOUVER Wed May 7, 2014 4:51pm EDT

VANCOUVER May 7 (Reuters) - Singapore-based Woodfibre LNG signed a letter of intent on Wednesday with the province of British Columbia, advancing the company's goal of making its first liquified natural gas shipments to Asia by early 2017.

Backed by Indonesian billionaire Sukanto Tanoto's RGE Group, Woodfibre LNG is an often overlooked front-runner in the race to build Canada's first LNG export terminal. The letter of intent ensures that the company and the province will cooperate on the proposed project.

As part of the deal, British Columbia has committed to providing certainty on all government-related costs, including formalizing its new two-tier tax on LNG export terminals.

A final investment decision on the $2 billion proposals expected in 2015, and exports could start in the first quarter of 2017.

"Woodfibre LNG hopes to be the first LNG export terminal in British Columbia," Imelda Tanoto, Woodfibre LNG's lead director, said in a statement.

With plans to export about 2 million tonnes of LNG each year, Woodfibre LNG is just one of 13 natural gas liquefaction and export terminals proposed for British Columbia's rugged Pacific coast. The province is banking on an LNG export boom to boost government revenue and create jobs.

The letter of intent comes just two days after Premier Christy Clark signed a similar deal with Malaysia's Petronas, which is developing the Pacific NorthWest LNG project near Prince Rupert, a port town in northwest British Columbia.

The deals set out the framework for project development agreements, expected by the end of November, which are the last major milestone ahead of a final investment decision.

Woodfibre LNG plans to build its liquefaction and export facilities on the site of a now-defunct pulp mill in the town of Squamish, 70 kilometers (43 miles) northeast of Vancouver.

The site comes equipped with a existing deep-water port, power infrastructure and a gas pipeline. The company has its export license and environmental assessment is underway. (Editing by David Gregorio)