Canada’s Pieridae Closes on Shell Acquisition
Canada’s Pieridae Energy said October 17 it has closed on its previously-announced C$190mn (US$145mn) acquisition of all of Shell Canada’s midstream and upstream assets in the southern Foothills region of Alberta.
The acquisition was funded through a combination of C$165mn cash and C$15mn of Pieridae common shares.
“We are very pleased to close this transformational acquisition as it secures the majority of the natural gas needed, once developed, to supply the first train at our Goldboro LNG facility for at least 20 years,” Pieridae CEO Alfred Sorensen said. “We will now complete our negotiations with Kellogg Brown & Root for a fixed price contract to construct the Goldboro LNG facility so that we can then proceed to complete the project financing and final equity raise and make a final investment decision.”
A final investment decision on the two-train, 10mn mt/yr Goldboro LNG export terminal in Nova Scotia is expected by year-end. All the output of the first train, and some of the second, has been provisionally sold to two European utilities.
The acquisition brings to Pieridae an extensive drilling inventory of dry and liquids-rich gas locations and interests in four major processing facilities, including Shell’s Jumping Pound and Waterton gas plants south and west of Calgary. Most of the staff of the facilities will transition from Shell to manage the assets, Pieridae said.
In the first six months of 2019, the acquired assets produced 119mn ft3/day of natural gas, 5,656 b/d of natural gas liquids and 3,163 b/d of condensate and light oil. Three deep cut, sour gas processing facilities – Jumping Pound, Waterton and Caroline – have a combined processing capacity of 750mn ft3/day. Along with 1,700 km of pipelines, the acquisition includes Shell’s 14% interest in the Shantz sulphur forming plant, part of the Caroline complex northwest of Calgary.
“There are additional opportunities to develop our liquids-rich areas, process the sour gas, strip out the liquids, store the dry gas and then further develop our dry gas resources down the road,” Sorensen added.