Shell deal gives Pieridae enough gas to start Goldboro LNG

By Helen Murphy    

GUYSBOROUGH – The purchase of Shell Canada’s gas-production facilities in the Alberta Foothills for $190 million — combined with the earlier acquisition of Ikkuma Resources — will give Pieridae Energy enough supply for the first phase (Train 1) of its Goldboro LNG project.

The deal announced June 26 will also see Shell become a major shareholder in Pieridae. The purchase price consists of $175 million in cash and $15 million in Pieridae shares.

“We said we would acquire additional gas supplies for the LNG facility and we have done that,” Pieridae CEO Alfred Sorensen said in a release. “Not only does this deal help us secure the remaining conventional natural gas supply needed for the first train of the Goldboro LNG project, it makes Pieridae a major player in the Alberta midstream and upstream industry.”

Pieridae expects to ramp up its drilling program in the Foothills over the next four years, creating and supporting thousands of Alberta jobs. The Goldboro Project would also create 3,500 jobs during construction of the LNG facility and 200 permanent jobs, making it Nova Scotia’s biggest-ever mega project.

James Miller, Pieridae’s director of external relations, told The Journal this deal makes the Goldboro project “truly shovel ready.”

Using conventional gas sources — as opposed to fracked gas — for its first facility at Goldboro is expected to allow Pieridae to access up to US$1.5 billion in credit support from the German government. The project is eligible for a total of up to US$4.5 billion in loan guarantees from the German government.

Pieridae has a 20-year agreement with German utility giant Uniper for the full capacity of Goldboro’s first Train and half of the total project.

Pieridae continues to negotiate arrangements to use existing pipelines to transport the natural gas from Western Canada to the Goldboro facility. Global engineering firm Kellogg Brown & Root Limited is reviewing an amended version of the previously prepared front-end engineering and design study for the project and working to finalize the cost of building the facility.

Pieridae has already received all major regulatory, environmental, import/export and construction permits for the Goldboro LNG Project.