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    Canadian Woodfibre LNG Faces Delay: Press


Covid-19, EPC difficulties cited for delay

by: Dale Lunan

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Canadian Woodfibre LNG Faces Delay: Press

Canada’s Woodfibre LNG project, a 2.1mn mt/yr liquefaction and export project on the shores of Howe Sound north of Vancouver, is reportedly facing a one-year delay due, in part, to the global Covid-19 pandemic and financial difficulties with its preferred EPC partner.

A final investment decision (FID) was expected earlier this year, with construction to start this summer. But now, the report from the local Squamish Chief newspaper said, construction won’t start until the summer of 2021.

FID has not yet been announced, and the company has applied to the BC Environmental Assessment Office (EAO) for a five-year extension of its environmental assessment permit, which expires in October.

The media report cited the Covid-19 related shut-down of a fabrication yard in China as one reason for the delay, and also suggested financial difficulties of Woodfibre’s preferred EPC contractor played a role.

“Last fall, Woodfibre LNG was nearing finalisation of an [engineering, procurement and construction] contract and announcement of a final investment decision when our preferred contractor for engineering, procurement and module fabrication, encountered financial challenges,” Woodfibre LNG CEO David Keane said in an email copied to the Chief. “In January 2020, our preferred contractor filed for Chapter 11 bankruptcy protection in the US and is now undergoing proceedings which are expected to continue until July 2020 at the earliest.”

Although Keane did not identify the EPC contractor, it is thought to be McDermott International, which filed for Chapter 11 protection in January and subsequently reached an agreement to sell its technology business Lummus as part of its reorganization plan. That reorganization plan received court approval earlier this month.

Other amendments to environmental approvals that Woodfibre had sought, including a switch to air cooling from water cooling and permission to provide floating workforce accommodations, were also cited as reasons for the delay.