Canada’s C$200m Woodfibre LNG Investment to Lift Capacity by 24%

Canada’s federal government has announced a C$200 million (US$140 million) investment in the Woodfibre LNG export project in British Columbia, supporting plans to increase the facility’s annual production capacity by between 19% and 24%.

The funding will enable Woodfibre LNG to raise its target capacity from 2.1 million tonnes per year to between 2.5 million and 2.6 million tonnes, according to Natural Resources Canada. The project is under construction near Squamish, on Canada’s Pacific coast, and is expected to begin operations in late 2027.

The investment was announced on 13 November by Energy and Natural Resources Minister Tim Hodgson. The government said the funding is intended to improve the facility’s reliability, efficiency and production, while also supporting the exploration of a potential second phase.

Woodfibre LNG capacity to increase to 2.6 million tonnes

Woodfibre LNG was originally designed to produce 2.1 million tonnes of liquefied natural gas annually. The federal investment will support upgrades that raise the facility’s targeted output to between 2.5 million and 2.6 million tonnes a year.

Reuters, citing a person familiar with the matter, reported that the expansion would involve improvements to cooling systems and the commissioning and mooring of floating storage tanks. The source also said the project’s owners were examining a possible second phase.

The increase would add between 400,000 and 500,000 tonnes to the facility’s planned annual capacity. At the upper end of the target, the expansion represents an increase of almost 24% over the original design.

Enbridge and Pacific Energy own the project

Woodfibre LNG is jointly owned by Enbridge and Singapore-based Pacific Energy. Enbridge holds a 30% interest, while Pacific Energy retains the remaining 70%, according to Enbridge.

The project’s original 2.1-million-tonne annual capacity is covered by long-term offtake agreements with BP Gas Marketing Limited. Enbridge says the agreements cover 100% of the facility’s original capacity for 15 years.

The planned increase raises a commercial question around how additional output will be marketed. The government announcement confirms the higher capacity target, but the available information does not specify whether the incremental volumes will be covered by new or amended supply agreements.

Canada seeks to expand LNG exports to overseas markets

The investment forms part of Canada’s broader effort to diversify its trade relationships and expand energy exports beyond the United States.

Natural Resources Canada said Woodfibre LNG is being developed in collaboration with the Sḵwx̱wú7mesh Úxwumixw (Squamish Nation). The project was approved through an Indigenous-led environmental assessment process, which the government describes as the first of its kind for a major industrial project in Canada.

The government also highlighted the facility’s planned use of British Columbia’s hydroelectricity to power its liquefaction operations. It expects the project to become the world’s first net-zero LNG facility when operations begin, although this is a government-stated expectation rather than an operational result.

For Canada, additional capacity at Woodfibre could contribute to its ambition to increase LNG exports to Asian markets and other international buyers. The project’s location on the Pacific coast provides access to shipping routes serving those markets.

Operations targeted for late 2027

Woodfibre LNG remains under construction, with operations targeted for late 2027. The capacity expansion will therefore need to be incorporated into the project’s remaining construction, commissioning and start-up work.

The owners are also considering a second phase, but no detailed investment schedule, capacity target or final development decision for that phase has been disclosed in the information available.

The next milestones will include delivery of the capacity upgrades, confirmation of the project’s commissioning schedule and clarity on commercial arrangements for the additional LNG volumes.

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