LNG

Pieridae Energy, the developer of the German-backed Goldboro LNG project in the Canadian Atlantic province of Nova Scotia, has had its purchase of Royal Dutch Shell’s midstream and upstream assets in the southern foothills of Alberta blocked by the provincial regulator.

Pieridae Energy, the developer of the Goldboro LNG project in the Canadian Atlantic province of Nova Scotia, said it had negotiated extensions of the key deadlines under its 20-year supply agreement with German utility Uniper.

These include expected commercial deliveries of shipments to Uniper to start between November 30, 2024 and May 31, 2025.

The Calgary-based company is seeking to build a liquefaction plant with an initial two Trains northeast of the Nova Scotia capital, Halifax.

Pieridae added that it had also extended to September 30, 2020, its deadline for making a financial investment decision (FID) for the Goldboro plant. The FID had previously been expected by mid-2020.

The 20-year agreement with Uniper is for 5 million tonnes per annum of LNG, half of the plant’s expected first phase capacity.

“These extensions allow us to complete the work needed to make a final investment decision for the Goldboro project,” said Pieridae Chief Executive Alfred Sorensen.

The company said it had most of the necessary Canadian federal and provincial regulatory permits to proceed.

Pieridae awarded a contract in April 2019 to US energy engineering company KBR to perform a review of an amended version of a previously prepared front-end engineering and design study of the Goldboro plant.

KBR will also conduct an “open-book estimate” necessary for an engineering, procurement, construction, and commissioning agreement with the intention of entering into an EPC contract by the time of the FID on Goldboro.

“We continue to have ongoing discussions with KBR that will ultimately lead to finalized designs and fixed costs for the project. We expect the vast majority of that work to be completed near the end of 2019, which will move us closer to FID,” explained Sorensen

Pieridae additionally signed an agreement in June 2019 with Shell Canada Energy to acquire all of Shell’s midstream and upstream assets in the southern foothills of Alberta province to boost its LNG feed-gas reserves.

The purchase price of the Shell Alberta assets is C$190 million (US$145M), including C$175M in cash to be raised by Pieridae through the issuance of debt and equity.

The balance will be in the form of the issuance of Pieridae common shares to Shell with an aggregate value of C$15M. Its shares are on the venture list of the Toronto Stock Exchange for small commodities companies.

The whole deal is expected to be finalized in the third quarter of 2019.

“Our recent announcement that we will be acquiring key Shell assets in the Alberta Foothills helps us secure much of the remaining conventional natural gas supply needed for the first Train at Goldboro,” said Sorensen.

“This is Eastern Canada’s only LNG facility with the majority of its permits, a pipeline route and an anchor customer. Goldboro LNG will create thousands of Canadian jobs and establish a solid global market for Canadian energy for years to come,” stated the CEO.

Shell has helped Goldboro LNG move forward as its own LNG Canada project in British Columbia survives as the only large-scale venture in BC from a dozen previously proposed.

Shell’s plans will cost C$40 billion (US$30.2Bln) to implement compared with the C$10Bln projected cost of the Nova Scotia plant.

The conventional natural gas assets Pieridae controls are expected to allow the company to access up to US$1.5 billion in credit support from the German government to develop these upstream assets as part of the Goldboro project.

KBR, the US energy and LNG engineering company, said it was awarded a contract by Toronto-listed Pieridae Energy for a two-Train export facility at Goldboro in the Canadian Atlantic Coast province of Nova Scotia as the German-backed venture moves closer to its final investment decision.

Pieridae Energy, the Canadian exploration and production company and developer of the Goldboro LNG export project in Nova Scotia with German-backed funding and sales accords, has signed a benefits agreement with First Nation people in the Atlantic coast province.

Pieridae said the agreement was negotiated with the Assembly of Nova Scotia Mi’kmaq Chiefs and has now been ratified.

Energy projects such as pipelines and industrial or energy plants are obliged under Canadian laws to recognise the land rights of Aboriginals in Canada who have spent decades establishing treaty commitments and seeking implementation of their rights.

“This benefits agreement establishes the framework under which the Mi’kmaq of Nova Scotia will benefit economically from the development, construction and operation of the Goldboro LNG Project,” said Pieridae.

The Calgary-based company, headed by Chief Executive Alfred Sorensen, is on the venture list of the Toronto Stock Exchange for small commodities companies.

Pieridae said a memorandum of understanding signed in 2013 originally outlined the relationship between Pieridae and the Mi’kmaq in Nova Scotia and the deal “underscores Pieridae’s commitment to ongoing engagement and relationship building” with the First Nations communities in Nova Scotia.

The Goldboro LNG project has been given the final go-ahead by the Nova Scotia Utility and Review Board after previously receiving its environmental approvals.

The final investment decision for the LNG venture is now expected by June 2019.

German utility Uniper is one of the Goldboro project’s customers and Pieridae has also received confirmation of eligibility in principle for up to US$1.5 billion of untied loan guarantees from the German federal government.

Pieridae proposes to produce 10 million tonnes per annum of LNG at the planned Nova Scotia plant.

The company has additionally signed a 20-year supply agreement with Uniper for 5 MTPA of its production and has embarked on a strategy of securing feed-gas resources for liquefaction.

In anticipation of the start of the design and construction process, Pieridae engaged Canadian consultants Hatch Ltd to act as its engineering adviser and the First Nations agreement was one of the last major issues outstanding.

“Nova Scotia is unceded Mi’kmaq territory and the management of our lands and resources is a priority for our Nation,” said Chief Terrance Paul, Co-Chair for the Assembly of Nova Scotia Mi’kmaq Chiefs.

“As we look to ensure responsible development and environmental stewardship that reflect a Mi’kmaq voice, it’s important that we can bridge that gap with industry,” said the Chief.

“This agreement with Pieridae is an example of how companies can respect our Mi’kmaw Rights and Title, and also provide an opportunity for Mi’kmaq participation in development on our lands,” he added.