Vancouver, BC /PRNewswire/ - Pacific Energy Corporation Limited (Pacific Energy) and Enbridge Inc. (Enbridge or the Company) (TSX: ENB) (NYSE: ENB) today announced an agreement to jointly invest in the construction and operation of the Woodfibre LNG project.
Woodfibre LNG is a 2.1 million-tonne-per-year liquefied natural gas (LNG) export facility with 250,000M3 of floating storage capacity being built near Squamish, B.C. The project is underpinned by two long-term offtake agreements with BP Gas Marketing Limited for 15 years representing 70% of the capacity, with additional commitments in development for up to 90%. Woodfibre LNG announced in April that it had issued Notice to Proceed to global engineering and construction company McDermott International and that the project is expected to be in service in 2027.
Woodfibre LNG will use electric motor drives powered by renewable hydroelectric power, making this one of the lowest-emission LNG export facilities in the world. The project is the only one in Canada with a non-treaty Indigenous-issued environmental assessment certificate, the first project approved under the Government of Canada's "Five Principles" for environmental assessment, and has received all major federal, provincial and First Nations approvals.
"This partnership is a milestone for the Woodfibre LNG project," said Ratnesh Bedi, President of Pacific Energy," "and it further accelerates Canada's ability to be a meaningful player in the global energy transition with the production of the world's lowest carbon LNG."
"Enbridge is an accomplished North American energy company with substantial natural gas operations in B.C. and Woodfibre LNG is pleased that the companies have entered into this investment agreement," said Christine Kennedy, President of Woodfibre LNG. "We believe this agreement speaks to the credentials of the project, from our world-leading Indigenous partnerships to the incredible environmental due diligence, and the ambition of Woodfibre LNG to produce the lowest-emissions LNG in the world."
"As a leader in the energy transition, Enbridge is excited to participate in the Woodfibre LNG facility through this partnership," said Al Monaco, Enbridge's President and Chief Executive Officer. "This facility will provide global LNG markets with a safe, secure and sustainable source of B.C. natural gas through long-term transportation agreement on our T-South pipeline system. This investment is a natural extension of our export pipeline strategy, with strong commercial underpinnings.
"Expanding global access to natural gas through LNG will play a critical role in North America's energy future and will help to reduce the world's greenhouse gas emissions through the displacement of coal-fired power generation, creating strong alignment with our ESG goals," added Monaco.
Under the partnership agreement, Enbridge will invest in a 30% ownership stake in the $5.1 billion Woodfibre LNG project, with Pacific Energy retaining the remaining 70% stake in the facility. Capital for the project includes a contribution in aid of construction for the expansion of FortisBC Energy Inc.'s ("FortisBC") Eagle Mountain to Woodfibre pipeline which will connect the facility through FortisBC's system to Enbridge's T-South natural gas transmission system.
Pacific Energy and Enbridge will each make pro-rata contributions during construction through a combination of asset level financing and equity investments. In exchange for its capital contribution, Enbridge will receive a preferred equity interest that provides predictable future cash flows. The partners will jointly participate in project's execution and governance of ongoing operations, while Pacific Energy retains responsibility for daily operations.
Construction of Woodfibre LNG will be undertaken through an engineering, procurement, fabrication and construction contract with McDermott International. McDermott President and Chief Executive Officer Michael McKelvy welcomed the partnership stating: "The addition of Enbridge is a natural fit as we work together to build the lowest-emission, most sustainable and innovative LNG export facility in the world. Their proven commitment to enabling a new generation of sustainable energy solutions aligns directly with our goal to set a new standard for efficient plant design."
BMO Capital Markets is acting as exclusive financial advisor to Pacific Energy Corporation on the transaction.
Enbridge Forward-Looking Information
Forward-looking information, or forward-looking statements, have been included in this news release to provide information about Enbridge Inc. ("Enbridge" or the "Company") and its subsidiaries and affiliates, including management's assessment of Enbridge and its subsidiaries' future plans and operations. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as ''anticipate'', ''expect'', ''project'', ''estimate'', ''forecast'', ''plan'', ''intend'', ''target'', ''believe'', "likely" and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements in this news release include statements with respect to Woodfibre LNG project and Enbridge's investment therein, including the characteristics, components and benefits thereof, expected in service dates, and anticipated costs and financing.
Although Enbridge believes these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Assumptions regarding the expected supply of and demand for crude oil, natural gas, natural gas liquids, liquified natural gas, renewable energy and other commodities, and the prices of these commodities, are material to and underlie all forward-looking statements, as they may impact current and future levels of demand for the Company's services and other energy-related services and products. Similarly, energy transition, including the drivers and pace thereof, exchange rates, inflation and interest rates impact the economies and business environments in which the Company operates and may impact levels of demand for the Company's and others' services and products and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty. The most relevant assumptions associated with forward-looking statements on announced projects and projects under construction, including estimated in-service dates and the realization of anticipated benefits, include the following: the impact of litigation and government, regulatory and stakeholder actions and approvals on construction and in-service schedules; the availability and price of labour and construction materials; the stability of the supply chain; the effects of inflation and foreign exchange rates on labour and material costs; the effects of interest rates on borrowing costs; technology-related matters; the impact of weather; and expectations about our partners' ability to complete and finance proposed projects.
Enbridge's forward-looking statements are subject to risks and uncertainties, including, but not limited to those risks and uncertainties discussed in this news release and in the Company's other filings with Canadian and United States securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and Enbridge's future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by applicable law, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made in this news release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to Enbridge or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements.
About Woodfibre LNG
The Woodfibre LNG Project is owned and operated by Woodfibre LNG Limited, a privately held Canadian company based in Vancouver, B.C. Woodfibre LNG Limited is the owner of the former Woodfibre pulp mill site, which is located about seven kilometers southwest of downtown Squamish, B.C.
Woodfibre LNG will source its natural gas from Pacific Canbriam Energy, a Canadian company with operations in northeastern B.C. Pacific Canbriam is an industry leader in sustainable natural gas production. For more information, please visit www.pacific-canbriam.ca.
Woodfibre LNG and Pacific Canbriam Energy are subsidiaries of Pacific Energy Corporation Limited.
About Pacific Energy
Pacific Energy, which is part of the Singapore-based RGE group of companies, is an independent energy resources development company focused on helping North America and growing Asian economies meet their increasing energy requirements. The company strategy is to invest, develop, build, own and operate innovative and cost-competitive projects throughout the energy value chain, while maintaining constant attention to our role as a responsible corporate citizen.
At Enbridge, we safely connect millions of people to the energy they rely on every day, fueling quality of life through our North American natural gas, oil or renewable power networks and our growing European offshore wind portfolio. We're investing in modern energy delivery infrastructure to sustain access to secure, affordable energy and building on two decades of experience in renewable energy to advance new technologies including wind and solar power, hydrogen, renewable natural gas and carbon capture and storage. We're committed to reducing the carbon footprint of the energy we deliver, and to achieving net zero greenhouse gas emissions by 2050.
Headquartered in Calgary, Alta., Enbridge's common shares trade under the symbol ENB on the Toronto (TSX) and New York (NYSE) stock exchanges. To learn more, visit us at Enbridge.com.