Goldboro LNG

Pieridae signs new engineering deal

Construction expected this year

By Helen Murphy    

CALGARY – Pieridae Energy announced Monday that it has engaged global engineering firm Kellogg Brown & Root Limited (KBR) to review its latest front-end engineering and design study for the proposed Goldboro LNG facility. KBR will also provide the estimate necessary for “entering into a lump sum turnkey engineering, procurement and construction (EPC) contract,” according to Pieridae’s news release. It anticipates signing that contract in the coming months.

On Tuesday, James Millar, director of external relations, told The Journal that Pieridae is continuing to proceed with a “two-train” project at Goldboro — meaning two production facilities. “The total cost estimate remains at $10 billion: $8 billion for the facilities and $2 billion to develop the upstream natural gas assets to supply Goldboro LNG. We engaged KBR to refine the estimate based on this scope of work,” he said.

But having the two facilities means Pieridae must secure additional gas supply. “We have said we need to look for new supplies of natural gas to supply both facilities,” said Miller. “That could mean more gas from Alberta, and the project would benefit from New Brunswick, Nova Scotia or Newfoundland gas – those are potential options.”

About switching to a new engineering firm Millar said, “We shifted as we started a new phase of the project and we looked for the best partner to review our designs and provide a detailed cost estimate. KBR is that partner. As we said in our news release yesterday, they have extensive global experience in building large-scale projects such as Goldboro. Gorgon LNG in Australia is one of those projects, very similar in size and scope to Goldboro. KBR has also been involved in virtually every proposed LNG project in Canada. So, a partnership with a company of this stature and experience brings a high level of credibility to the project.”

Pieridae expects to start construction activities in 2019 and ship first gas overseas to meet the expected global LNG shortfall in 2023/2024.

“We are extremely pleased with this development as it marks a major step in getting the Goldboro LNG facility built,” said Alfred Sorensen, Pieridae’s Chief Executive Officer in the news release. “This is Eastern Canada’s only fully permitted LNG facility with gas supplies, a pipeline route and an anchor customer. Goldboro LNG will create thousands of Canadian jobs and establish a solid global market for Canadian natural gas for years to come.

“With the terms of an EPC contract due shortly, Pieridae will have met all of the criteria needed to move to a final investment decision on Goldboro,” added Sorensen.

“This initiative will reinvigorate dormant natural gas reserves in southern Alberta, potentially creating 1,300 jobs alone in 2020 as drilling operations begin, along with field and office work. And in Nova Scotia, the Goldboro LNG facility will be the largest project ever built, employing 3,500 men and women during construction, 30 per cent of the province’s entire unionized workforce,” said Sorensen in the company’s news release.

According to some financial analysts, Pieridae is ‘poised to be the first LNG company to market in Canada’, the release noted. With total development costs for natural gas production and the liquefaction facility expected to reach $10 billion, the Goldboro LNG facility will produce 10 million tonnes per year of LNG at its site in Goldboro, Nova Scotia, northeast of Halifax. It will supply much needed natural gas to Europe, helping countries like Germany implement its planned transition to a low-carbon, nuclear and coal-free economy, while diversifying its sources of natural gas supply currently dominated by Russia. Pieridae says the Goldboro project is unique in a number of ways:

 

  • Goldboro is fully permitted. All major regulatory, environmental, import/export and construction permits are in place.
  • Pieridae has signed a 20-year sales agreement with German utility Uniper worth approximately $35 billion, the largest export contract in Canadian history.
  • The German government is supportive of the project, declaring it eligible in principle for up to US$4.5 billion in loan guarantees.
  • Pieridae owns natural gas assets in the Alberta Foothills, allowing it to maximize financial success.
  • Agreements are in place to use existing pipelines to transport the natural gas from Western Canada to the Goldboro facility’s front door.
  • A benefits agreement has been signed with the Assembly of Nova Scotia Mi’kmaq Chiefs. The agreement means the Mi’kmaq will benefit economically from the development, construction and operation of the facility.

 

“The benefits of this project to Canadians are undeniable and we are excited to continue moving forward,” said Martin Bélanger, Senior Vice President Goldboro LNG. “We feel we can deliver a best-in-class design at a globally competitive price and ultimately build a world-class facility that all Canadians will benefit from for generations to come.”