LNG customer walks away

Photo: Contributed

The dissolution of an agreement between Woodfibre LNG and a potential client has local activists crowing that the controversial project has taken a serious blow.

However, a Woodfibre representative is calling those characterizations “wildly misleading.”

Company spokesperson Rebecca Scott said Woodfibre never considered this potential client a customer, and that talks were “very preliminary.”

For days, My Sea to Sky has been trumpeting Guangzhou Gas’s decision to walk away from their heads of agreement with Woodfibre for one million tonnes of LNG per annum for 25 years.

The environmental group is holding this development as an example of how, according to them, Woodfibre is struggling to find buyers for its product.

Previously, the creation of the Guangzhou Gas agreement was widely publicized. Then-premier Christy Clark was on hand for its official signing back in May 2016.

“We really don’t know what’s going on with this company,” Eoin Finn of My Sea to Sky said Monday. “Or whether any of this is real. And our skepticism increases every time things like this happen.”

On the other hand, Scott said the Guangzhou agreement was not a deal. Rather, it was an agreement to discuss the possibility of making a deal.

“As with any business, we will continue to have discussions with various potential buyers for our LNG,” she said in an emailed statement. “Some of them will progress and others won’t. This is the normal course of business for every company, including ours.”

She said the company does have interested buyers.

“Woodfibre LNG is proud to have three major customers for our LNG, including BP,” said Scott. “These customers remain unchanged over the past year.”

The company announced it signed a binding deal with BP Gas Marketing Limited in June this year. Under the terms of that agreement, BP will receive 0.75 million tonnes per year of liquefied natural gas over 15 years.

My Sea to Sky, however, says that BP Gas Marketing isn’t an end-user of LNG, and will have to find buyers to sell Woodfibre’s product. They likened it to hiring a real estate agent rather than actually selling a house.

Woodfibre, however, says that BP has made a significant long-term firm deal with the company to buy a set amount of LNG and said it’s inaccurate to suggest it’s just a marketing deal.