LNG

Canadian company Capital Power has agreed to acquire two US gas-fired power stations in California and Arizona for US$1.1 billion as the facilities become more attractive amid abundant natural gas and as back-up for intermittent renewables.

Valeura Energy Inc., the upstream oil and natural gas company with assets in the Gulf of Thailand and planned appraisal activities for tight natural gas in the Thrace Basin of Turkey, has reported improved third-quarter results.

Valeura, which is listed on the Toronto Stock Exchange and the over-the-counter market in the US, released earnings for the three months to the end of September.

In the third quarter, Valeura sold 1.701 million barrels of crude oil and the company recorded oil revenues of US$149.4 million, versus nil in the same quarter of 2022, which was prior to the company having active production operations.

Valeura said operating expenses increased in the quarter largely due to a planned increase in the amount of well workovers and the volume of maintenance and inspection work performed across the portfolio.

Valeura reported operating expenses of US$55.3 million in the quarter. The expenses included production operations at its Jasmine, Nong Yao, and Manora fields, as well as expenses relating to maintaining the Wassana asset during the precautionary suspension of production operations.

Jasmine field

The Jasmine offshore oilfield is located within block B5/27, at a water depth of about 60 metres. The block covers an area of around 1,931 square kilometres in the Gulf of Thailand.

The Nong Yao field is a producing conventional set of wells located in shallow water offshore Thailand while the Manora field lies in 44 metres water and about 80km from the coast of Thailand.

Valeura’s average realised price for crude oil sales was US$87.8 a barrels in the quarter, reflecting an average premium to the Brent crude oil benchmark of around US$1.3 per barrel.

Valeura, which is based in Calgary, Alberta is carrying out appraisals in the Thrace Basin of northwest Turkey.

The company said this is a potential natural gas area which has under-explored and under-exploited conventional and tight gas plays with the opportunity to deploy technology such as 3D seismic, horizontal drilling and multi-stage fracking.

Thrace activities

“The company had no active operations in Turkey during the third quarter as it continued its search for a farm-in partner to pursue the next phase of work on its tight gas appraisal play in the Thrace Basin, where it holds interests ranging from 63 percent to 100 percent,” Valeura explained.

Oil production amounted to 19,961 barrels a day in the third quarter and adjusted cashflow from operations was US$33.9m.

“I am pleased to announce another stable quarter of production operations, which underscores the long-term, resilient asset base we have assembled in Thailand,” said Sean Guest, President and Chief Executive of Valeura.

“Ongoing infill drilling is replenishing produced volumes and offsetting natural declines, resulting in oil production rates staying in the 20,000 barrels per day range. As a result, we are today re-affirming our 2023 guidance estimates, unchanged,” Guest added.

“Cash flow generation remains strong, and has provided us the ability to pay down debt, cover tax payments, fund the cost of ongoing operations, and still record an increase in our net cash position, which at the end of the quarter stood at US$104 million,” stated the CEO.

Valeura said that the mergers and acquisitions market for additional field assets continued to present “appealing opportunities”.

“We feel it is prudent to ensure our balance sheet is robust, such that we can transact quickly once opportunities arise,” Guest said.

March 28 (LNG) - Canacol, the natural gas exploration and production company with a small-scale LNG production operation in the South American nation of Colombia, reported a rise in annual revenues to US$307 million, up from US$284M in 2021. Net income came to US$147.3M as the Toronto-listed company’s structure was also re-organized.

   Canacol is a gas supplier as well as operating its small liquefaction plant which can convert 2.4 million standard cubic feet per day of gas into 29,000 gallons of LNG sold into the fuel market. Cancol said it hoped to improve sales as it makes progress with a gas pipeline project linking its processing plant at Jobo to the city of Medellín and adding 100 million cubic feet per day of gas sales in the interior in late 2024 and taking gas sales to over 300 million cubic feet per day.

Africa Oil Corp., a Canadian energy company based in Vancouver and with producing and development assets in deep water Nigeria, has signed production-sharing contracts with LNG potential offshore Equatorial Guinea in West Africa.

Brookfield Infrastructure Partners of Canada has raised its hostile takeover bid for Inter Pipeline Ltd to about C$8.58 billion (US$6.86Bln) to counter for a second time a bid from Pembina Pipeline Corp., the joint venture partner of the Cedar LNG project in British Columbia.

Pembina had made an all-stock bid of about C$8.50 billion, or C$19.7 per share, while Brookfield has trumped that offer with an all-cash option.

Brookfield is based in Toronto in the province of Ontario while Inter Pipeline and Pembina have their headquarters in Calgary, capital of the oil and gas province of Alberta.

Brookfield said Inter Pipeline shareholders could now choose to receive either C$20.00 per share in cash or 0.25 of a share of Brookfield Infrastructure Corp, which translates into C$23.85 for each Inter share.

“The increased offer provides superior value to Inter Pipeline shareholders, representing a premium of C$1.53 or 8 percent versus the proposed transaction with Pembina Pipeline,” stated Brookfield.

It had previously offered about C$19.50 in all-cash per Inter share, or 0.225 of Brookfield’s Class A share.

Inter Pipeline had already recommended that shareholders vote for the offer from Pembina.

The sweetened offer from Brookfield came a day after the Alberta Securities Commission ruled that Inter did not engage in any improper defensive tactics to fend off Brookfield’s first hostile takeover bid.

Bidding war

The bidding war is for Inter Pipelines oil and gas pipeline assets, located mainly in Western Canada, as well as its storage facilities and processing plants.

Pembina, the joint developer of the Cedar floating LNG joint venture in BC with the Haisla First Nation, also owns the rejected Jordan Cove LNG export project in the northwest US state of Oregon.

Pembina’s Jordan Cove project was the first hydrocarbon venture stopped by the federal regulators under the Biden Administration, even before the Keystone XL pipeline cancellation by presidential decree.

The Jordan Cove liquefaction plant was proposed for a 200-acre site at Coos Bay in Oregon, comprising five small-scale Trains, each with 1.5 million tonnes per annum of output, for a total of 7.5 MTPA.

The Jordan Cove project also included the separate 230-mile Pacific Connector Pipeline traversing four counties in southern Oregon on the route to the liquefaction plant and feed gas would have been sourced from the Rockies.

Since the Jordan Cove cancellation in January 2021, Pembina has teamed up in a 50-50 partnership with the Haisla Nation for the proposed Cedar project in the Douglas Channel near the BC town of Kitimat.

Cedar LNG is expected have a liquefaction capacity of around 3 MTPA of LNG and will source natural gas from the prolific Montney resource play in northeast BC.

'Strategic Combination'

Under the “Strategic Combination”, Inter Pipeline shareholders would have receive 0.5 of a common share of Pembina for each common share of Inter Pipeline.

This represented an immediate value of $20.06 per share based on the closing price of Pembina's common shares.

Pembina and Inter Pipeline shareholders would have owned 72 percent and 28 percent respectively of the combined Pembina-Inter company.

Pembina had said that among the significant benefits for Inter Pipeline was being included in the partnerships with First Nations to develop Cedar LNG and to pursue ownership of Trans Mountain Pipeline and Expansion.

Pembina was chosen by the Western Indigenous Pipeline Group to be the industry partner in the formation of the Chinook Pathways Partnership.

Chinook Pathways is an Indigenous-led partnership working to organize a significant number of First Nation communities to pursue ownership of the Trans-Mountain Pipeline following completion of the construction of the Trans-Mountain Expansion.

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.

Pieridae Energy, developer of the German-backed Goldboro LNG project in the Canadian Atlantic province of Nova Scotia, has had its shares suspended on the Toronto stock market pending a material announcement.

Pieridae Energy, developer of the German-backed Goldboro LNG export project in the Canadian province of Nova Scotia, has entered into agreements for a private placement of shares with a group of banks and brokers and two other transactions to raise some funding.

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.

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, reported a net loss in its latest earnings as it awaited the completion of an acquisition.