Pieridae says KBR will not provide fixed-cost contract for Nova Scotia LNG plant
13/07/2020 19:43
July 13 (Reuters) - Pieridae Energy Ltd PEA.V said on
Monday that KBR Inc KBR.N will not provide a fixed-cost
contract to build the Canadian energy firm's proposed Goldboro
liquefied natural gas (LNG) export plant in Nova Scotia, and
Pieridae said it is exploring its legal options.
Pieridae in April had delayed making a final investment
decision to build the $10 billion project until after Sept. 30
as government efforts to curb the coronavirus outbreak cut
global economic growth and energy demand. urn:newsml:reuters.com:*:nL2N2C40NV
In June, KBR, a U.S.-based engineering firm, said it planned
to exit most LNG and other energy projects. urn:newsml:reuters.com:*:nL1N2DZ2GA
“We are looking at all of our options, including discussing
the matter with legal counsel to determine the most appropriate
next steps,” Pieridae's chief executive, Alfred Sorensen, said
in a statement.
"KBR’s decision to no longer provide a fixed-price contract
is in apparent contravention of its obligation under the terms
of a signed services agreement dated March 27, 2019," Pieridae
said.
Officials at KBR were not immediately available for comment.
Pieridae is one of several companies developing North
American LNG export plants that have delayed projects as global
gas prices TRNLTTFMc1 JKMc1 dropped to their lowest levels
in years in an oversupplied market in 2019, and then plunged to
record lows in 2020 with the coronavirus-induced collapse in
demand. urn:newsml:reuters.com:*:nL2N2C40SZ
Goldboro is designed to produce almost 10 million tonnes per
annum (MTPA) of LNG, or about 1.3 billion cubic feet per day
(bcfd) of natural gas.
Pieridae has a 20-year agreement to sell all of the LNG from
the first liquefaction train at Goldboro - about 5 MTPA - to
German utility Uniper SE UN01.DE starting between Nov. 30,
2024 and May 31, 2025.
Pieridae said Uniper has agreed to extend the FID deadline
to June 30, 2021.
Pieridae said it expects construction to take about 56
months.
(Reporting by Scott DiSavino)
((scott.disavino@thomsonreuters.com; +1 646 223-6072; Reuters
Messaging: scott.disavino.thomsonreuters.com@reuters.net))