It seems that two Liquified Natural Gas (LNG) projects targeted for the Strait area have travelled different directions.
The company behind the $10 billion Goldboro LNG project, Pieridae Energy Ltd., now owns all of Shell Canada’s midstream and upstream assets in the southern Alberta Foothills.
In a statement on October 17, Pieridae said they closed the $190 million acquisition, taking ownership of Royal Dutch Shell’s gas assets in Alberta’s Foothills region, which can provide most of the gas needed to supply the first of two plants at the Goldboro terminal.
Pieridae will also acquire three deep cut, sour gas processing plants; Caroline, Jumping Pond, and Waterton, a 14 per cent working interest in the Shantz sulphur forming plant, and approximately 1,700 kilometres of pipelines.
Poised to be the first Canadian company to market LNG off the east coast, the Goldboro LNG terminal has the potential to compete with LNG facilities along the U.S. Gulf Coast, via a shorter distance to Europe that can help reduce shipping costs.
The Goldboro LNG facility, which will produce 10 million tonnes per year of LNG, will supply much needed natural gas to Europe and has signed a 20-year sales agreement with German utility Uniper Global Commodities worth approximately $35 billion.
Pieridae now has an extensive drilling inventory including multiple dry gas and liquids-rich gas reservoirs in Alberta, and can now leverage the $1.5 billion of anticipated German government-backed guarantees for conventional gas supply development for the upstream gas production part of the project.
Alfred Sorensen, Pieridae’s CEO said they are now working to complete negotiations with Kellogg Brown & Root Limited for a fixed price contract to construct the Goldboro LNG facility, so they can proceed to project financing and the final equity raise and make a final investment decision.
Around this time, the company planning to build a LNG plant, pipeline and related facilities in Bear Head, Richmond County applied for extensions on their construction permits.
Sister companies Bear Head LNG Corporation Inc. and Bear Paw Pipeline Corporation Inc. jointly applied to the Nova Scotia Utility and Review Board (UARB) on October 4 requesting a three-year extension on their permits – which are set to expire on December 31.
John Baguley, the chief operating officer with Bear Head LNG, said the company has to delay construction so it can secure the necessary natural gas feedstock for the LNG facility.
Because of changes in the global energy market, including a “substantial” imbalance in LNG supply-demand, long-term purchase commitments being deferred by the market, and instability in energy prices, Baguley said it is taking longer than expected to obtain binding LNG agreements required to underpin the construction program.
But Bear Head LNG is very optimistic they can secure the necessary supply during this extension period.
In September, Bear Paw Pipeline filed its 2019 biannual benefits report which states the company spent $269,000 in Nova Scotia during the first half of the fiscal year and this includes; about $154,221 in private consulting costs; $77,779 for site and office costs; $29,808 is listed under First Nations; $5,000 for permitting; and about $2,728 in community donations.
Last year, the biannual benefits report indicated the total expenditure in the province during the first half of the fiscal year reporting period was just below $500,000. During the peak of its planning, the company had expenditures of $5.4 million in 2016 and $1.2 million in 2017.
Despite the amount of money already invested and the company’s optimism (so much so that it obtained construction permits), it seems Richmond County’s LNG project is further behind because it has not yet secured a natural gas supply to attract financing for construction.
Meanwhile, Goldboro LNG has most of its feedstock supply and is preparing financing for the final investment decision to allow construction to start.
While it appears the projects are heading in opposition, directions, it’s more likely they are at different stages, using different routes to arrive at the same destination.