Pieridae Energy to Scale Up LNG Spending in 2020
Natural Gas World Nov 6, 2019 5:54:pm
Canada’s Pieridae Energy, which is developing the 10mn mt/yr Goldboro LNG project in the east coast province of Nova Scotia, said November 6 it has approved a “pre-final investment decision capital budget” of C$32mn (US$24.3mn) and an LNG development expense budget of C$16mn for 2020.
Expenses related to Goldboro were just $3.1mn in the third quarter, down from about $10mn in 2Q 2019, as Pieridae limited spending on the project in the second half to focus its efforts on closing the purchase of Shell Canada’s Foothills assets in Alberta. That deal closed in mid-October.
“Pieridae now has an extensive drilling inventory that includes multiple dry gas and liquids-rich gas reservoirs within the Foothills area,” the company said in releasing its 3Q 2019 financial results. The Shell acquisition, it said, now positions the company to leverage US$1.5bn of government-backed loan guarantees it received from the German government to develop conventional gas supplies.
Pieridae also has US$3bn of loan guarantees from the German government to support construction of the Goldboro LNG facility. All of the output from the first 5mn mt/yr train will be taken by German utility Uniper, which is currently fighting off a hostile takeover bid from Finnish clean energy developer Fortum.
It is unclear what impact Fortum’s efforts to increase its stake in Uniper to 70.49% from 49.99% might have on the off-take agreement with Pieridae.
Pieridae’s natural gas production in 3Q 2019 averaged 86.9mn ft3/day, down from 90.2mn ft3/day in 2Q 2019, reflecting production shut-ins related to the low gas price environment in western Canada.
“The poor pricing environment continues to force the company to limit its capital investment to sustaining production, as opposed to growing it,” Pieridae said. Exploration and development expenditures in the third quarter were $1.8mn and $3.3mn year-to-date.