Woodfibre LNG awards EPFC contract to McDermott

SINGAPORE – Media OutReach – 26 November 2021 – Woodfibre LNG has signed an Engineering,
Procurement, Fabrication, and Construction (EPFC) contract with McDermott
International. The EPFC contract is an important step in advancing detailed
engineering and construction scheduling work in advance of Woodfibre LNG
issuing a notice to proceed.

Responsibly produced natural gas is a
necessary part of making a successful global transition from heavy-emitting
fuels to renewables. By harnessing the low-carbon gas resources of British
Columbia’s Montney region to replace coal-fired energy sources in Asia,
Woodfibre LNG will reduce global emissions by 3.5 million tonnes CO2e per
annum, equivalent to removing 5 per cent of B.C.’s annual emissions from the
atmosphere each year. McDermott and Woodfibre’s collaboration on front-end
engineering and facility design, relative to typical LNG facilities, will
result in an ~86 per cent reduction in carbon dioxide emissions per tonne of
LNG produced.

Woodfibre LNG, a subsidiary of Pacific
Energy Corporation (Canada) Limited which is a member of the
Singapore-headquartered RGE group of resources-based companies founded by
Sukanto Tanoto, will be the cleanest liquefied natural gas export facility on
earth, achieved through the adoption of a low-emission philosophy across every
element of engineering and design. The facility will use hydroelectricity for
the main liquefaction process, and includes state of the art technology that
enables liquefaction machinery to restart without flaring, a recycling system
for “boil-off” gas, and additional transformers, switchgear and transmission
lines. Altogether, this results in the most groundbreaking technical
achievement in the world of LNG, and sets a new standard for efficient plant
design. This next-generation LNG production is in high demand. Woodfibre LNG
has two offtake agreements signed with BP, meaning over 70 per cent of
Woodfibre’s annual throughput has already been sold.

McDermott’s industry-leading NetZero
Modular LNG strategy has been fully utilized during the development of this
advanced onshore gas processing and liquefaction facility with floating storage
near Squamish, British Columbia, Canada. The strategy provides multiple
pathways through design, execution and construction to reduce operational and
project emissions.

“Our contract with McDermott is a
positive step forward for this substantial piece of clean energy
infrastructure,” said Christine Kennedy, president of Woodfibre LNG. “Together,
we will be building the lowest-emission, most sustainable and innovative LNG export
facility in the world. A particular point of pride for us is that the Squamish
Nation serves as a full environmental regulator for this project. Serving as a
unique example of economic Reconciliation, this is the first arrangement of its
type for an LNG facility.”

McDermott will manage onshore
construction, leveraging Canadian-based contractors and commitments included in
Woodfibre LNG’s Impact Benefit Agreements with the Sḵwx̱wú7mesh Úxwumixw
(Squamish Nation). It is estimated that 650 people will be working on the
Woodfibre LNG site at peak construction. The EPFC contract commits McDermott to
Woodfibre LNG’s hiring priority for qualified Squamish Nation members and local
workers first, followed by British Columbians and then Canadians. The joint
priority is to create a safe, inclusive and respectful workplace that brings
benefits to the project’s Indigenous partners and community.

“This is another example of how we are
applying our unique integrated capabilities to solve challenges and create
successes for our customers,” said Samik Mukherjee, Executive Vice President
and Chief Operating Officer of McDermott. “This award is a tremendous
opportunity to further demonstrate how our LNG and modularization expertise
enables a new generation of sustainable energy solutions.”

In addition to the EPFC work, McDermott
will also be responsible for commissioning and start-up services Pre-installation
work for the project is planned for early 2022 and will gradually ramp up to
September 2023, when major construction is targeted to begin. Major works will
continue through to substantial completion, expected in Q3 2027.