A second attempt is under way to fulfill environmental rules for a supply deal for the Goldboro liquefied natural gas export facility proposed for Canada’s east coast after the Alberta Energy Regulator (AER) rejected the first transaction plan.

Project sponsor Pieridae Energy Ltd. said action would be launched “swiftly” to adapt to AER requirements for its C$190 million ($142 million) takeover of southern Alberta midstream and upstream natural gas assets from Royal Dutch Shell plc that it acquired last year. The assets would provide the majority of natural gas needed to supply Goldboro’s first liquefaction train.

The AER denied regulatory approval for a proposed transfer of provincial licenses for the gas properties to Pieridae from Shell. The companies sought a split of conservation and reclamation liabilities that was unclear and conflicted with Alberta law, according to AER.

The regulator said the firms are welcome to apply again for approval of a revised license transfer formula. Meanwhile, the asset deal is acceptable in its present incomplete form, AER added.

Pieridae runs the gas wells, pipelines and processing plants. Shell retains the provincial licenses and associated environmental liabilities. In Alberta, “the licensee and the operator can be different,” said AER’s decision. “This current arrangement between Shell and Pieridae accords with the AER’s regulatory framework.”

Pieridae said, “Both companies are moving swiftly to evaluate options on the transfer applications and will continue to attempt to seek clarity from the regulator to define an appropriate path forward.”

The company said in April that it would delay a final investment decision on the eight-year-old Goldboro project on the Atlantic coast of Nova Scotia until next year due to the Covid-19 pandemic. The facility would export up to 10 million metric tons/year.