Pieridae to spend $16MM on proposed Nova Scotia LNG project in 2020

Daily Oil Bulletin Deborah Jaremko Dec. 13, 2019

Fuelled by expectations of a ten-times increase in its net operating income, Pieridae Energy plans to invest to advance its proposed Nova Scotia LNG project to a final investment decision next year.

On Thursday the company announced a “pre-FID” capital budget of $32 million for 2020, and a development expense of $16 million for the Goldboro LNG project.

Under a 20-year supply deal with German utility Uniper for 5 mtpa, or half of the capacity of the US$10-billion project, Pieridae is facing a deadline of September 30, 2020 for FID. That deadline was extended earlier this year, from September 30, 2019.

The current timeline targets commercial deliveries starting November 30, 2024 and May 31, 2025.

Pieridae expects to realize net operating income of $80 million to $110 million in 2020, which otherwise would have been approximately $10 million, were it not for the company’s acquisition of Shell Canada’s midstream and upstream assets in the Southern Alberta Foothills for $190 million in October 2019.

Pieridae expects production in 2020 of 40,000-50,000 boe/d, a 230 to 290 percent increase over its Q3/19 exit volumes.

“A doubling or close to tripling of daily production speaks to the value of the acquisition and provides us with the majority of the gas resource necessary to supply train 1 at Goldboro,” CEO Alfred Sorensen said in a statement.

“It’s Pieridae’s advantage of being an integrated LNG company and not just a gas producer and processor that sets us apart from our peers. Delivering on our stated goals of completing a fixed price contract with KBR and finalizing project financing puts us in a position to make a final investment decision for Goldboro LNG next year. We continue to make progress toward that goal.”

FID for Goldboro LNG in Nova Scotia Possible in 2020, Says Exec

Natural Gas Intelligence Gordon Jaremko December 13, 2019

A C$16 million ($12 million) development expense budget will keep alive in 2020 the delayed plan to export natural gas from Canada’s Atlantic coast via the Goldboro terminal in Nova Scotia, according to project sponsor Pieridae Energy Ltd.

The company said it remains committed to its latest stated target to reach a final investment decision in 2020 about whether to build the liquefied natural gas (LNG) terminal Goldboro LNG for tanker deliveries to Europe.

When the 1.4 Bcf/d export project was announced in October 2012, Pieridae projected that the export terminal would be in operation by late 2018.

“We continue to make progress,” said Pieridae President Alfred Sorenson.

Pieridae’s 2020 targets include finalizing a construction contract with engineering conglomerate KBR and a multibillion-dollar loan guarantee sought from the German government. Pieridae has worked to secure a $1.5 billion loan guarantee from a clean fuel incentive program.

In August, Pieridae cut this year’s 2019 development budget by 56% to C$20 million ($15 million) from C$45 million ($33.8-million) after low commodity prices caused losses on Alberta natural gas production.

The firm now expects 2020 operating income of C$80-110 million ($60-82.5 million), thanks to its C$190 million ($142.5-million) asset purchase from Shell Canada Ltd. in October. The 2020 Pieridae budget includes drilling for gas that would supply Goldboro.

The Shell midstream and upstream assets are expected to provide most of the gas needed to supply the first train at the proposed Goldboro facility.

The Shell acquisition increased Pieridae’s gas output to 210 MMcf/d from 91 MMcf/d. The package also included 8,819 b/d of natural gas liquids and light oil.

Pieridae announces 2020 budget for Goldboro

Guysborough Journal Helen Murphy December 18, 2019

GUYSBOROUGH – In updating its financial projections for 2020 on Dec. 12, Pieridae Energy revealed its development expense budget for Goldboro LNG as the company moves closer to a Final Investment Decision (FID) for the project.

“We have approved a pre-FID capital budget of $32 million and a development expense budget for Goldboro LNG of $16 million in 2020,” CEO Alfred Sorensen said in the company release.

“It’s Pieridae’s advantage of being an integrated LNG company and not just a gas producer and processor that sets us apart from our peers,” added Sorensen. “Delivering on our stated goals of completing a fixed price contract with KBR and finalizing project financing puts us in a position to make a final investment decision for Goldboro LNG next year. We continue to make progress toward that goal.”

Pieridae announced earlier it has engaged global engineering firm Kellogg Brown & Root Limited (KBR) to review its front-end engineering and design study for the proposed Goldboro LNG facility and provide an estimate necessary for construction of the project.

The company’s recent acquisition of Shell Canada’s gas-producing properties in the Alberta Foothills gives Pieridae enough supply for the first train (facility) of the project.

“Together with existing Foothills drilling and development experience within the Company, Pieridae is well positioned to leverage the US$1.5 billion of the government-backed loan guarantees for conventional gas supply development which the German government approved in principle,” the company said of the financing option in support of the Goldboro LNG project.

Pieridae has signed a 20-year sales agreement with German utility Uniper for LNG from Goldboro, worth approximately $35 billion -- the largest export contract in Canadian history.