• Natural Gas News

    Canada’s Goldboro LNG Expects FID by Year-End

Summary

Pieridae Energy is close to securing full gas supply for first train

by: Dale Lunan

Posted in:

Natural Gas & LNG News, Americas, Liquified Natural Gas (LNG), Corporate, Investments, News By Country, Canada

Canada’s Goldboro LNG Expects FID by Year-End

The CEO of Canada’s Pieridae Energy said June 11 the company is close to finalising gas supply for the first train of its 10mn mt/yr Goldboro LNG project in the east coast province of Nova Scotia and plans to take a final investment decision on at least that unit by the end of this year.

Speaking with NGW on the sidelines of the Global Petroleum Show’s strategic conference in Calgary, Alfred Sorensen said finding gas producers willing to commit to a 20-year liquefaction and export project has been difficult, but he’s confident of closing “soon” an arrangement for up to 800mn ft3/day of western Canadian gas to supply the first 5mn mt/yr train at the $10bn (US$7.5bn) Goldboro terminal.

“What we are working on now could essentially supply our entire first train – about 900mn ft3/day – and hopefully we are exceptionally close right now,” Sorensen said. Pieridae’s Ikkuma Resources, which it acquired in December 2018, will supply about 100mn ft3/day.

Gas supply is needed not just to meet liquefaction needs at Goldboro, but also to fuel gas-fired compressors and the project’s power plant. About 750mn ft3/day will be left for liquefaction after those internal demands are met, Sorensen said.

The entire output of the first train has been committed to German utility Uniper, while Swiss utility Axpo has committed to 1mn mt/yr of output from the second train. Off-take agreements have been reached for most of the remaining 4mn mt/yr of output from the second train, but Sorensen said he was not at liberty to reveal those customers.

“Whether we take FID on one train or both will depend on where we are at with the supply,” he told NGW. “We intend to take FID by the end of the year and we have a good track [on off-take commitments] for the second train.”

Speaking as part of a panel discussing Canadian natural gas and LNG issues at the conference, Sorensen admitted that negotiations for supply with western Canadian producers have been difficult given the lengthy time commitments required.

“This is a marathon, not a sprint, and we have never been able to get producers to commit to something that will take 20 years,” he said. “That is the primary problem for the gas industry in Canada – they don’t like to look 15 or 20 years into the future.”

Darren Gee, CEO of Canadian pure-play gas producer Peyto Exploration & Development, said thinking long-term is a challenge for producers, but it is one they are going to have to meet if they hope to tap global markets for their output.

“But remember that 10 years ago we were looking to build natural gas import facilities; now we are building export facilities,” he said. “We need confidence that the [global LNG] market that is there now will still be there 20 years from now.”