(Adds background on Squamish environmental consultations)
By Nia Williams
CALGARY, Alberta, Nov 4 (Reuters) - Woodfibre LNG will start building British Columbia's first liquefied natural gas processing and export terminal in 2017, it said on Friday, a project that would grant Canada a long-awaited opportunity to enter the global market.
The facility near Squamish, north of Vancouver, will export 2.1 million tonnes a year once it is operational in 2020, according to a company statement.
However, Woodfibre is relatively small compared to other proposed LNG projects in the province and will have little impact on weak Canadian natural gas prices, said Samir Kayande, a director at research group RS Energy.
More than a dozen LNG projects have been proposed for British Columbia, but the global slump in energy prices has undermined their feasibility and delayed investment.
In September, Canada approved a proposed C$36 billion, 12-million-tonne-a-year LNG project by Petroliam Nasional Berhad. But Petronas, as the Malaysian state-owned oil company is known, has yet to give the final go-ahead, and Canadian aboriginal and environmental groups have filed lawsuits to stop it. held Woodfibre said its Singaporean parent authorized funds for the facility after British Columbia offered a competitive electricity rate for LNG projects. based in Vancouver, is a subsidiary of Pacific Oil & Gas Ltd, which is part of the Singapore-based RGE Group of companies.
Byng Giraud, country manager for Woodfibre, said in a statement the cheaper rates were what allowed the "go forward" decision to happen. The plant will be powered using electricity rather than natural gas.
The British Columbia government, which is keen to develop an LNG industry, welcomed the green light for the C$1.6 billion project and said it would be one of the largest private sector investments in the southern part of the province.
Gas for the facility will come from northeastern British Columbia via Spectra Energy (NYSE:SE) and Fortis Inc-owned pipelines.
Environmental group the Pembina Institute warned the project would make it harder for British Columbia to meet its 2050 carbon emissions targets.
Squamish Mayor Patricia Heintzman said the announcement was somewhat "jumping the gun" as there are 25 environmental conditions put forward by the Squamish First Nations still being worked out.
Squamish Chief Ian Campbell could not be immediately reached for comment.
Woodfibre has legally committed to and will continue to work to meet those obligations, said company spokeswoman Jennifer Siddon.