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The site of the Woodfibre LNG project, a proposed small-scale liquefied natural gas (LNG) processing and export facility in Squamish, B.C., on July 23, 2014. TRafal Gerszak/The Globe and Mail

A small liquefied natural gas project north of Vancouver is poised to move to construction in the first quarter of 2019, adding momentum to Canada’s efforts to become a significant exporter of the supercooled fuel.

The $1.6-billion Woodfibre LNG project, backed by Indonesian billionaire Sukanto Tanoto’s RGE Group, would be Canada’s second LNG project to go ahead, following the approval of the massive LNG Canada project earlier this month.

“We’re hoping to move to a notice to proceed to construction in Q1 [of 2019],” Woodfibre LNG president David Keane said on Tuesday. “It will be some time in February or March.”

Woodfibre LNG is a relatively small project at 2.1 million tonnes per annum (mtpa), but was long touted as the front-runner to get Canadian natural gas to Asian markets, where demand for the fuel is booming. It was given the go-ahead in 2016, but then delayed as the company worked through a number of issues.

Mr. Keane said the project is nearly there – the company is just working with engineering contractor KBR Inc. on reducing costs and awaiting a November decision on import tariffs on fabricated steel components, used for LNG liquefaction units.

“We’ve been very clear as an industry that there is no capability in Canada to build these large, complex modules,” Mr. Keane said. “We feel that the federal government will be fair.”

Woodfibre also needs to finalize its benefit agreement with the local Squamish Nation, which Mr. Keane said has been initialled, but needs to be formally signed by council. He hopes that will be done by year end.

Once a construction decision is made, the project will be completed in roughly four years, ensuring first shipments of the supercooled fuel by 2023.

LNG Canada, which will produce some 14 mtpa further north in the town of Kitimat, B.C., has said it expects to be shipping fuel before 2025.

Woodfibre has sold 100 per cent of its first-phase output and financing for the build is in place, Mr. Keane said. The project has also secured its gas supply and is working with utility FortisBC on a 47-kilometre pipeline connection.

Editor’s note: October 24: An earlier version of this article stated the first shipments of supercooled fuel would be by 2024. In fact, the construction period is expected to be four years and shipments will begin by 2023.

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