Woodfibre LNG purchases major equipment, feds to waive duties on fabricated steel

Rendering of the proposed Woodfibre LNG project. Image: Woodfibre LNG

The Woodfibre LNG project has ordered a central piece of equipment as it continues to work toward a final investment decision this summer.

At the same time, the federal government says it will provide the project relief from duties on fabricated steel contained in construction modules, as it did previously for the LNG Canada project.

The proposed Woodfibre project near Squamish, B.C. has ordered its cryogenic heat exchanger, which liquefies and sub-cools nature gas for shipment overseas.

The company calls the unit the heart of the liquefaction process and one of the most important requirements for producing LNG.

"This purchase indicates Woodfibre LNG's continued commitment to moving forward towards our FID and start of construction later this year," president David Keane said in a statement.

A 2017 ruling by the Canadian International Trade Tribunal found that the dumping of some goods from China, Korea and Spain have had a negative impact on Canada’s economy.

As a result, anti-dumping fees were imposed on fabricated industrial steel components from those countries. These tariffs could reach up to 45.8 per cent.

Woodfibre and others argued that those tariffs were unfair, but in November 2018, the Canada Border Services Agency ruled the duties would apply to LNG modules as well.

Woodfibre and LNG Canada are now both protected from the tariffs.

A statement from the federal government says the construction modules are key components that are not available in Canada.

Remission of anti-dumping and countervailing duties is generally provided only in situations where there are exceptional circumstances, such as domestic short supply, the feds say.

"As Canada’s transition to a cleaner future gains momentum, our government will continue to support projects that have the potential to meet our energy needs while helping more people get ahead. Woodfibre LNG, along with LNG Canada, are prime examples of how economic growth, environmental protection and partnerships with Indigenous Peoples can come together to create good, well-paying middle-class jobs," said Minister of Finance Bill Morneau.

Tracey Saxby, of My Sea to Sky said Woodfibre LNG was "putting the cart before the horse” with this purchase.

"Most companies would make a final investment decision before purchasing capital equipment. With the price of LNG in Asia hitting a10-year low, this seems like a risky move by Woodfibre LNG," she said, adding that the company still has to apply for amendments to their environmental assessment certificates and other permits.

Saxby questioned why provincial and federal governments are "working so hard" to help Woodfibre LNG.

"The federal government’s support of Woodfibre LNG makes a mockery of their motion declaring a ‘climate emergency,’” she said.

“We should not be investing in new fossil fuel infrastructure that will lock us into extreme carbon pollution for another 25 to 40 years.”

— Squamish Chief

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