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Pieridae Gets OK to Export U.S. Gas to Canada For Liquefaction

Pieridae Energy (USA) Ltd. has received U.S. Department of Energy (DOE) approval to export U.S. natural gas to Canada to be liquefied at the proposed Goldboro LNG Project in Nova Scotia and then exported as liquefied natural gas (LNG) to countries with which the United States has a free trade agreement (FTA).

Last fall the company sought authorization from DOE for exports to serve FTA and non-FTA countries (see Daily GPI, Oct. 31, 2014). The non-FTA portion of the application is still pending at DOE.

The FTA approval issued last Friday covers export of up to 292 Bcf per year of natural gas (0.8 Bcf/d) via the Maritimes Northeast (M&N) U.S. and Canada pipelines. The natural gas exported to Canada will be purchased by Pieridae and will then be processed at the proposed Goldboro LNG liquefaction facility located in Goldboro, NS, and exported as LNG to FTA countries. Some of the gas could be consumed in Canada.

Pieridae's related application at Canada's National Energy Board is pending. In June 2013, Pieridae entered into a 20-year sales agreement with Europe's E.ON Global Commodities SE, a subsidiary of one of the world's largest investor-owned power and gas companies, to deliver five million tonnes per annum (mtpa) of LNG from the Goldboro facility.

At the time of its DOE application, Pieridae said that as the LNG market matures, "...LNG may be unloaded from a carrier in an FTA country, then reloaded and exported to a non-FTA country where the LNG is regasified and ultimately consumed. Similarly, LNG could be exported to a non-FTA country, gasified, and then shipped by pipeline for consumption in an FTA country."

Goldboro LNG is expected to be capable of producing 10 million mtpa of LNG with two liquefaction trains. The maximum on-site LNG storage capacity will be equivalent to 9.7 Bcf of natural gas. Gas is to be sourced from the United States and Canada for use as feedstock in the production of LNG from Train 2 for export to customers.

"Citing the existing M&N U.S. Pipeline, its interconnections with other pipeline systems in the eastern United States, and the 'various proposed enhancements to such natural gas transportation facilities,' Pieridae asserts that it will have the ability to source natural gas from 'almost any point' on the U.S. natural gas pipeline grid through direct physical delivery or by displacement," the DOE order said [14-179-LNG]. "Pieridae further states that natural gas from the Marcellus and Utica producing regions can be readily tapped to source its proposed exports."

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