Goldboro LNG signs up financing partners

Pieridae looks for options for waste heat

By Helen Murphy    
March 7 2018

GUYSBOROUGH – Pieridae Energy continues to make advances towards its final investment decision for Goldboro LNG in June.

Site clearing began on Feb. 27, with contractor R.H. MacLean Forestry of Antigonish. The late-winter work is timed to get ahead of the nesting season for migratory birds.

Also last week, Pieridae announced it has engaged Morgan Stanley and SG Americas Securities to serve as financial advisors for the project. Pieridae intends to raise up to $10 billion (US) in equity and debt financing to build the LNG facility.

During an interview Tuesday, Pieridae CEO Alfred Sorensen told The Journal that both financing organizations wanted to raise the full $10 billion alone.

"We wanted to split it," he said, explaining that this would give them better access to both E.U. and U.S. funding.

"The compromise was worth it for them," he said, "to be part of the project."

Sorensen said having these two recognized financial brands on board "adds a lot of credibility." He said large investors will provide the majority of capital for building the project, and they like to see these kinds of organizations involved.

On the equity side of the financing, Sorensen said it will involve a "major road show" with himself and their CFO this summer. He said Pieridae met many potential investors over the past four years who asked them to come back when they get to the point of construction.

Pieridae is developing a shortlist of about 20 companies that are each capable of writing $400-$500 million cheques as investors, to raise $2 billion in equity financing.

The bulk of the monies needed -- $8 billion -- will be raised through debt financing. Sorensen said some investors could be big enough to get involved on both the debt and equity sides.

Potential investors are attracted in part by Pieridae's 20-year purchase agreement with Germany's Uniper. Sorensen said Goldboro LNG will eventually provide about 10 per cent of Germany's gas needs.

Another attraction is a loan guarantee from the German government to help build the project infrastructure.

When asked about efforts to minimize the environmental impact of the project, Sorensen said Goldboro LNG will produce an enormous amount of waste energy and efforts are being made to identify another use for that energy.

"The process of turning vapour into liquid is a very energy-intensive activity...Waste heat comes out the other side. It can be recovered in a number of different ways. One option is to turn it into electricity."

Sorensen said there will be enough waste heat to service another development in close proximity to the facility, such as an agriculture operation with greenhouses requiring lots of heat. An example would be trees that are produced in Nova Scotia for export, he said. The waste heat could help grow them much faster. He said Pieridae has been discussing possibilities for use of the surplus heat with the Municipality of the District of Guysborough.