Calgary-based pipeline giant has declared that it will make a 30% investment in the construction and operation of the project, which is now expected to cost $5.1 billion,
On July 29, Woodfibre published a saying its parent company, Pacific Energy Corporation Limited, and Enbridge struck a deal that would have Pacific retaining a 70% stake in the facility.
Capital for the project will include funds to help build the , which will connect the facility to Enbridge's T-South natural gas transmission system.
Executives from Pacific Energy, Woodfibre and Enbridge hailed the development as a positive step forward for the project.
"This partnership is a milestone for the Woodfibre LNG project," said Ratnesh Bedi, president of Pacific Energy in the news release. "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."
Woodfibre president Christine Kennedy hailed the deal as confirmation of the project's integrity.
"Enbridge is an accomplished North American energy company with substantial natural gas operations in 小蓝视频 and Woodfibre LNG is pleased that the companies have entered into this investment agreement," said Kennedy in the release. "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."
Enbridge's president and CEO expressed excitement about the deal.
"This facility will provide global LNG markets with a safe, secure and sustainable source of 小蓝视频 natural gas through a long-term transportation agreement on our T-South pipeline system," said Al Monaco. "This investment is a natural extension of our export pipeline strategy, with strong commercial underpinnings."
As outlined in the release, 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 the project's execution and governance of ongoing operations, while Pacific Energy retains responsibility for daily operations.
Local environmentalists used the announcement as a chance to question the latest cost estimate of the project.
""The price tag for Woodfibre LNG has ballooned from $1.6 billion to $5.1 billion — and now it's relying on a lifeline from Enbridge," said Tracey Saxby, the executive director of , in a written statement.
"The economic viability of this project is shaky, and depends on millions of dollars in financial incentives and subsidies from government. This is a risky investment by Enbridge that has a high likelihood of becoming a stranded asset."
Saxby also questioned the project's profitability and said it would harm the environment.
"LNG is not a short-term transition fuel. Building LNG facilities is a multi-decade investment that will increase fracking in northern 小蓝视频 and lock the province into fossil fuels for decades," she said. "By the time Woodfibre LNG is built, the demand for LNG will be gone as the world rapidly transitions to more affordable renewable energy. There is no such thing as low-emissions LNG. We cannot solve climate change by burning more fossil fuels."
On the other hand, Woodfibre spokesperson Rebecca Scott took issue with Saxby's characterization of the Enbridge investment as a lifeline.
"Woodfibre LNG welcomes the expertise and certainty that comes with this new partnership, but to be clear, the project would have been built without it," Scott said.
She also addressed the increased cost estimate for the project and questions about whether it would turn a profit.
"It's been several years since we last updated an estimate for the cost to build this project, and prices have risen considerably," said Scott. "But the demand for low-emission LNG has also risen. In contrast with our earlier estimate, the $5.1 billion price tag now includes the cost to build the pipeline. Over 70% of our future production is already sold, and we are in discussions for the sale of another 20%. We expect to be delivering gas to global markets in 2027."
On Friday, Enbridge reported earnings attributable to common shareholders dropped in its most recent quarter despite higher revenue.
Enbridge earned $450 million or 22 cents per share in its second quarter, compared with $1.39 billion or 69 cents per share a year earlier.
Adjusted profits were $1.35 billion or 67 cents per share, compared with $1.36 billion or 67 cents per share in the same period of 2021.
Revenue in the three months ended June 30 was $13.22 billion, compared with $10.95 billion in the prior year quarter, the company said.
Enbridge reaffirmed its 2022 financial guidance for earnings before interest, taxes, depreciation and amortization of between $15.0 billion and $15.6 billion and distributable cash flow of $5.20 to $5.50 per share.
It said strong operational performance is expected to be offset by challenging market conditions affecting energy services and higher financing costs due to rising interest rates.
-With files from The Canadian Press
