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Big lift to Canadian Atlantic LNG venture
Gary Park for Petroleum News
After years of making measured progress towards a final investment decision on the first LNG project for Canada’s Atlantic Coast, Pieridae Energy has taken a giant leap forward.
It is paying C$175 million in cash and issuing C$15 million worth of shares to Royal Dutch Shell as it closes in on securing the remaining feedstock natural gas it needs for the first train of the Goldboro project.
Pieridae said the acquisition of Alberta gas production is a key step towards approving the C$10 billion plant to be located northeast of Halifax, Nova Scotia, with its sights set on starting commercial operations in 2023 to ship 10 million metric tons a year to the northeastern United States and Europe.
Company Chief Executive Officer Alfred Sorensen said that, with all of the regulatory approvals in place, Shell’s ownership stake in Goldboro will be beneficial.
“Obviously they are a big player in the LNG story and we’ll take advantage of their expertise anyway we can while they are a shareholder and hopefully they will remain one for a while,” he told the Globe and Mail.
Shell also active on Pacific Coast Shell is also leading the charge to build the first large-scale LNG operation on the Pacific Coast, with its 40% stake in the C$40 billion LNG Canada project along with a consortium of Asian partners.
With the acquisition, Pieridae will get production of 29,000 barrels of oil equivalent in natural gas, natural gas liquids and condensate, along with three gas plants in southern Alberta.
The company plans to use TC Energy and Enbridge-owned pipelines to ship Alberta gas to the Nova Scotia facility and has signed a long-term sales agreement with Uniper, a German utility.
The Shell assets will ensure Pieridae has enough gas to meet the sales contract.
The German government has said Uniper is eligible in principle for up to US$4.5 billion in loan guarantees, including US$1.5 billion for upstream natural gas development.
Shell Canada President Michael Crothers said his company is pleased to take the Shell assets “to the next stage of their development.”
If the Goldboro project gets a corporate go ahead it will plug the gap created when the Sable Offshore Energy Project (in which Shell was a 31.3% partner) ceased operations last December after 19 years of shipping gas to Nova Scotia, New Brunswick and the northeast U.S.
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