GUYSBOROUGH – The prospect of Pieridae Energy greenlighting its $10 billion Goldboro LNG project soon seems more likely following recent announcements.
Last week, Switzerland’s Axpo Group announced it is negotiating a purchase and sale agreement with Pieridae to acquire LNG from Train 2 of the Goldboro liquefaction facility. Axpo plans to sell the LNG across Europe.
The agreement is scheduled to begin from the start of commercial deliveries from Goldboro, currently estimated to be in the third quarter of 2023, and last for a 10-year period.
Fifty per cent of Goldboro LNG’s initial capacity has already been pre-sold under a 20-year sales agreement with Germany’s Uniper Global Commodities SE.
Also last week, Pieridae announced the appointment of KfW IPEX-Bank as an adviser in helping it finalize a multibillion loan guarantee from the German federal government.
In 2013, Pieridae received confirmation that its LNG project qualifies in principle under Germany’s UFK program for a guarantee of up to $3 billion (US) of debt to be used to construct the Goldboro LNG facility. Among other things, the guarantee would require that at least 1.5 million metric tons per year of LNG is delivered to Germany/Europe.
In July 2018, Pieridae applied to the German government to increase the amount of the guarantee. The additional coverage would be used to develop natural gas reserves in both Western and Eastern Canada. Pieridae is currently negotiating a potential acquisition to utilize this funding.
“Over the coming months Pieridae will launch the formal process to secure the required capital (equity and debt) to finance the integrated Goldboro LNG Project,” the company’s Aug. 15 release states.
“As we progress through our upstream acquisition and development plan toward a final investment decision (FID) on the Goldboro LNG Project, the support of the German government is of vital importance,” said Alfred Sorensen, CEO of Pieridae.
A Financial Post story on Aug. 14 said Sorensen is expecting the construction permit from the province and the completion of agreements with contractors within the coming weeks. The article also says Pieridae is close to sealing a deal to merge with a natural gas producer in Alberta, which would give the company gas supply for the Goldboro project.
These milestones, the story says, will allow Pieridae to begin construction of the Goldboro LNG project by the end of 2018.
MODG Warden Vernon Pitts says these new developments are generating a lot of buzz in the community.
“A lot of times people are sitting in the wings and not hearing any news, but (Pieridae) has to exercise due diligence,” he said. “We’re talking about $10 billion.”
The warden’s longstanding optimism about the Goldboro LNG project has been bolstered by these recent announcements.
“I only expect good things coming down the pipe the next couple of weeks,” he said during an interview Monday.
“The major thing for the municipality is the creation of employment opportunities,” he said. “We have so many of our young people away working, many in the oil and gas industry. Maybe this will be a chance for some of them to come back home.
“There are good things coming.”