Canadian E.Coast LNG export plans progress with Pieridae's Shell deal
18/10/2019 15:01
* Pieridae takes ownership of Shell's Alberta gas fields
* The gas will feed first train of Goldboro LNG terminal
* Pieridae has $4.5 bln German government guarantee
* LNG terminal would be the first on Canada's East Coast
By Sabina Zawadzki
LONDON, Oct 18 (Reuters) - Pieridae Energy PEA.V moved
closer to building a liquefied natural gas (LNG) export terminal
on Canada's East Coast after taking ownership of fields from
Royal Dutch Shell RDSa.L which will feed gas into the plant,
the company said.
The Goldboro LNG terminal would be the first on Canada's
East Coast and compete with the growing number of plants on the
U.S. Gulf Coast, hoping its shorter distance to Europe and
further west will help sell its LNG by cutting shipping costs.
Pieridae said in a statement late on Thursday it had closed
a C$190 million ($145 million) acquisition of Shell's gas assets
in Alberta's Foothills region, giving it most of the gas needed
to supply the first of two plants at the Goldboro terminal.
"We will now complete our negotiations with Kellogg Brown &
Root Limited for a fixed price contract to construct the
Goldboro LNG facility so that we can then proceed to complete
the project financing and final equity raise and make a final
investment decision (FID)," Pieridae CEO Alfred Sorensen said.
The Canadian LNG industry has been slower than its U.S.
counterpart to take advantage of soaring gas demand around the
world and build export plants, in part due to securing feedstock
supplies for the terminals.
This contrasts to the U.S. Gulf Coast, where there is so
much gas being produced thanks to the shale revolution, some
producers have had to pay buyers to take it off their hands.
urn:newsml:reuters.com:*:nL2N22Y09T urn:newsml:reuters.com:*:nL2N2511OZ This makes it easier for LNG projects
there, which tend to buy gas rather than own gas assets.
Five large LNG export terminals operate in the United States
including the 25 million tonne a year (mtpa) Sabine Pass,
operated by Cheniere Energy LNG.A . By contrast, there are no
operating LNG export facilities in Canada although Shell has
begun constructing a massive one on the West Coast. urn:newsml:reuters.com:*:nL4N1WI1FF
Unusually for LNG projects in the developed world, Pieridae
has a $4.5 billion German government guarantee and has one
German buyer, Uniper UN01.DE , for all 5 million tonnes a year
produced by its first train, a large contract by industry
standards.
Pieridae said the Shell deal allows it to begin to leverage
a $1.5 billion of the German government guarantee for the
upstream gas production part of its project. The rest of the
guarantee applies to the construction of the terminal itself.
Germany, as yet, has no facilities to import LNG but three
import terminals have been proposed, including in Wilhelmshaven,
a project owned by Uniper Global Commodities. urn:newsml:reuters.com:*:nL5N22W4X4
Europe's gas production is expected to fall in future years
with the shutdown of the huge Dutch Groningen gas field and the
gradual depletion of reserves in the North Sea.
As part of Germany's involvement in the project, 1.5 million
tonnes of LNG sold to Uniper must land in the Netherlands and
the subsequent regasified gas shipped to Germany by pipeline,
Pieridae's corporate documents showed.
($1 = 1.3137 Canadian dollars)
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Canadian E.Coast LNG export plans progress with Pieridae's Shell
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(Reporting by Sabina Zawadzki; editing by David Evans)
((sabina.zawadzki@thomsonreuters.com; +44 207 542 4051;))