A contender to launch liquefied natural gas (LNG) exports from Canada’s east coast, Pieridae Energy Ltd. has set out to double its production with a C$190 million ($142 million) purchase of Royal Dutch Shell plc legacy assets in Alberta.
The deal, announced Wednesday, would increase Pieridae’s gas output to 221 MMcf/d, or 28% of the 800 MMcf/d required by the first stage of its proposed Goldboro LNG terminal offshore Nova Scotia.
The southern Alberta package, a network with a 70-year pedigree dating from the dawn of the modern Canadian petroleum industry, also includes natural gas liquids and oil output of 8,807 b/d, three processing plants and 1,020 miles of pipelines.
Pieridae CEO Alfred Sorenson called the deal “solid progress for our flagship Goldboro LNG project.” Work will continue on securing pipeline service for the 2,900-mile trip Alberta gas has to take to the proposed export terminal, said the company.
Canadian east coast offshore gas production ended at the end of 2018. Nova Scotia and Quebec have ruled out gas replacements by instituting hydraulic fracturing bans, while a New Brunswick government plan for regional exemptions from its ban has run into public resistance.
After postponing a promised 2018 final investment decision to start construction, Pieridae has told its shareholders to watch for action sometime this year. The firm also continues to seek government loan guarantees in Germany, Goldboro LNG’s prime target market.
Pieridae said loans and share sales would pay for its new Alberta gas purchase.
Shell, which is advancing LNG Canada with its partners on the west coast in British Columbia, said the deal reflects “increasingly prioritized investment in growing integrated gas and shales businesses. The recent decision to invest in the multibillion-dollar LNG Canada project, Shell share 40%, is part of this strategy.”
The second Canadian east coast LNG export project, Bear Head LNG Corp., earlier this year secured project participation and benefits agreements with Nova Scotia native and labor groups. The subsidiary of Australia-based Liquefied Natural Gas Ltd., which also owns the Magnolia LNG project in Lake Charles, LA, has set no construction date for the estimated C$5 billion ($3.8 billion) Nova Scotia project.
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