Deal helps Pieridae meet gas supply needs

CALGARY, ALTA.: In a critical step on the road to building the $10 billion Goldboro LNG project, the company behind the project, now owns all of Shell Canada’s midstream and upstream assets in the southern Alberta Foothills.

Poised to be the first Canadian company to market LNG off the east coast, Pieridae Energy Ltd.’s Goldboro LNG terminal has the potential to compete with the increased presence of LNG facilities along the U.S. Gulf Coast, with a shorter distance to Europe that can help reduce shipping costs.

In a statement on October 17, Pieridae said they had closed the $190 million acquisition, taking ownership of Royal Dutch Shell’s gas assets in Alberta’s Foothills region, providing most of the gas needed to supply the first of two plants at the Goldboro terminal.

“We are very pleased to close this deal as it helps us secure the majority of the gas needed to supply the first train at Goldboro,” Alfred Sorensen, Pieridae’s CEO said. “We will now complete our negotiations with Kellogg Brown & Root Limited for a fixed price contract to construct the Goldboro LNG facility,” Alfred Sorensen, Pieridae’s CEO said. “So that we can then proceed to complete the project financing and final equity raise and make a final investment decision.”

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.

The Goldboro LNG facility 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 worth approximately $35 billion.

Pieridae now has an extensive drilling inventory including multiple dry gas and liquids-rich gas reservoirs in the Foothills, and is now in an ideal position to 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.

“But more than that, it creates a solid, ongoing foundation for the company as we continue to build toward becoming the first Canadian company to market LNG off the east coast to global consumers,” Sorensen noted.