Woodfibre LNG Agreement Answers Clean Energy Needs and Drives Jobs

According to Energy Information Administration (EIA), China is attempting to use more natural gas to reduce air pollution and carbon dioxide emissions, which are largely caused by coal and oil usage for energy. Underpinned by large investments in domestic gas production and infrastructure, along with growing imports, the Chinese government anticipates increasing its gas share of total energy consumption to around 8% by year end 2015 and to 10% by 2020. In 2012, natural gas accounted for only 4.9% of China’s total energy consumption.

In fact, besides China, it has become a global awareness to support the consumption and production of clean energy in order to ensure sustainability of resources. New entrepreneurs these days are also looking into clean energy innovations or coming up with business ideas that do good for the environment and profitable at the same time. Woodfibre LNG, a subsidiary of Pacific Oil & Gas, which is in turn part of the RGE Group of companies headed by Sukanto Tanoto, has recently signed an agreement with Chinese province of Guangdong, to support their demand for LNG for the next 25 years.

Near the end of September 2014, the Chinese province of Guangdong announced the opening of a trade office in Vancouver, Canada, that will serve as the first of its kind in that country. This move also coincides with the signing of a preliminary offtake agreement between Guangzhou Gas Group Co Ltd and Woodfibre LNG, a Singapore-based firm that plans to export liquefied natural gas from western Canada. Guangzhou is the capital and largest city in Guangdong Province.

Woodfibre LNG and Guangzhou Signing of MOU
Guangzhou Gas Group Co. Ltd. and Woodfibre LNG have signed a memorandum of understanding (MOU), outlining a long-term stable supply of natural gas to meet Guangzhou City’s gas demands starting in 2017 (targeted date).

British Columbia’s premier, Christy Clark (2nd row, 3rd from right), has supported both the increased Chinese trade presence in her province and her government’s developing relationship with Woodfibre. The Woodfibre-Guangzhou agreement highlights the growing strength of the Tanotos’ plans to establish an LNG export hub in the town of Squamish, near Vancouver.

The Woodfibre agreement with Guangzhou will cover close to one-half of the Singapore company’s planned yearly output of liquefied natural gas. The terms state that Woodfibre, currently working with the goal of starting operations in 2017, will provide Guangzhou with 1 million tonnes of natural gas per year for 25 years. China is the world’s third-largest importer of natural gas, and its urban areas along the coast account for much of its demand Click here for more information.

Woodfibre’s planned site, at the location of a defunct pulp mill, has optimal access to existing infrastructure such as industrial zoning, a deep-water port, a gas pipeline, and a functioning power grid. Company executives also point to the environmental benefits of the construction of a FortisBC gas pipeline partly through a pre-existing route. Clark, in turn, has extolled the LNG industry’s capacity to create new jobs in the province and Woodfibre estimates that its project in Squamish will create 500 jobs in construction and 100 full-time staff positions.

Woodfibre LNG Explores Clean Energy

Always looking out for new ideas, new industry and new market to enter into, Sukanto Tanoto has done an intensive research on natural gas and their potential as a clean alternate energy in the future. This project is also strongly supported by his eldest daughter, Imelda Tanoto, who is heavily involved in the whole process from planning to execution. Read here for more information.

Natural gas is increasingly in demand, throughout the developed world and in emerging economies, as an affordable and “clean” source of energy. With production up by more than one-third in the United States compared to a decade ago, natural gas offers attractive options for energy companies and consumers alike. When burned as fuel, natural gas produces only about half the carbon dioxide emitted by coal-powered plants, which makes it popular with many environmentalists. Moreover, according to the United States Environmental Protection Agency, natural gas emits less than one-third the amount of nitrous oxides and about 1 percent the amount of sulfur dioxides as coal. The burning of natural gas also requires a minimal amount of water and does not create any significant concerns regarding disposal of solid waste.

Woodfibre LNG, an arm of the RGE Group’s Pacific Oil & Gas company, is currently working to open an operations plant to liquefy natural gas and export it from western Canada. RGE, directed by founder and CEO Sukanto Tanoto of Indonesia, hopes to make Woodfibre a leading player in the growing international market for natural gas products. In 2014, Woodfibre executives, led by Imelda Tanoto, Mr. Tanoto’s daughter, signed a letter of intent with the government of British Columbia (Premier Christy Clark) to explore options that would benefit both parties as well as the people of the province.

In addition, the 13 million vehicles worldwide currently powered by natural gas produce approximately 30 percent fewer greenhouse gas emissions than those that run on traditional gas and diesel sources. Depending on conditions in local markets, natural gas can be significantly cheaper than other fuel sources, which makes it a good choice for developing economies.

Woodfibre’s proposed Canadian export station would re-purpose a now-unused Vancouver-area pulp mill, located on land with an existing industrial pipeline infrastructure and electrical grid, all of which stand to minimize the impact that constructing an entirely new facility could produce.

Imelda Tanoto Leads Woodfibre LNG’s Canadian Natural Gas Project

As an entrepreneur, Sukanto Tanoto’s entrepreneurial spirit has been passed down to his children as well. Imelda Tanoto, Sukanto Tanoto‘s eldest daughter, has been involved in the business operations for the past 7 years. During these 7 years, she has been exposed to different functions of the organization. Given the influence from her father since young, Imelda Tanoto is continuously finding ways to expand the business. When opportunity in Canada arises, Imelda Tanoto decided to take the calculated risk and went on with the investment in LNG market in Canada.

Imelda Tanoto signed Letter of Intent with British Columbia Premier, Christy Clark.
Imelda Tanoto signed Letter of Intent with British Columbia Premier, Christy Clark.

Currently she oversees her family’s investments in Canadian natural gas supplies through Woodfibre LNG. The company, with the backing of the $15 billion RGE Group headed by Mr. Tanoto, recently signed a letter of intent with the government of British Columbia. The letter outlined the parties’ common goal of directing supplies of liquid natural gas from Canada to Asia by the early part of 2017. As lead director of Woodfibre LNG, Imelda Tanoto participated as a signatory to the document, along with British Columbia’s premier, Christy Clark, during a trade mission. Other international companies, including Royal Dutch Shell and the Malaysian state company Petronas, are also engaged in exploring liquid natural gas exports from western Canada.

Canada, which is ranked fourth among nations worldwide in the amount of natural gas exported, currently serves a largely U.S. market. However, due to Canada’s vast reserves of shale – from which liquid natural gas is derived – in the provinces of British Columbia and Alberta, and a strong upward trend in demand from Asian markets for LNG supplies, the partnership between Woodfibre LNG and Canada is expected to be a good fit. Canada currently lacks the kind of infrastructure that would support its expansion into the Asian sector. However, Woodfibre LNG is proposing the construction of a new facility for processing natural gas, as well as Canada’s first-ever terminal for exporting natural gas abroad.

Under the direction of Imelda Tanoto, the Canadian facilities would be built on the site of an unused pulp mill in an industrial area in the town of Squamish, British Columbia, located about 40 miles from Vancouver. The region is home to needed features such as a deepwater port, a preexisting pipeline, and an electrical power infrastructure. The $2 billion facilities would be set to export a little more than 2 million metric tons of LNG annually.