Swiss utility in LNG supply talks with Canada's Goldboro project
16/08/2018 11:12
LONDON, Aug 16 (Reuters) - Axpo, a Swiss utility and energy
trader, said on Thursday it was in talks with a Canadian company
planning to build a liquefied natural gas (LNG) terminal on the
country's East Coast for a 10-year supply deal.
If the talks lead to a Sales and Purchase Agreement (SPA),
they would help boost the chances of the C$10 billion ($7.6
billion) Goldboro project being built by Pieridae Energy PEA.V
to become the first LNG export terminal on Canada's East Coast.
Canada is rich in oil and gas but has yet to export LNG to
Asia from its West Coast or across the Atlantic from its East
Coast in commercial quantities despite major companies planning
20 export terminals.
"Under the term sheet with Pieridae Energy, Axpo will
purchase LNG from Train 2 of the Goldboro liquefaction facility
and sell it across Europe," Axpo said in a statement.
"The contract is scheduled to begin from the start of
commercial deliveries, currently estimated to be in the third
quarter of 2023, and last for a 10-year period."
Pieridae's Chief Executive Alfred Sorensen told the
Financial Post on Tuesday the company was close to taking a
Final Investment Decision (FID) on the project next month after
spending the past year seeking permits and talking to
contractors and buyers.
Five other projects on Canada's East Coast have also been
proposed although initiatives have stuttered in recent years as
global LNG prices fell due to an anticipated glut.
Now, although prices are higher, Canada's LNG would be in
competition with exports from new facilities in the United
States, which are ramping up to volumes seen as a gamechanger
for the global market in years to come.
Another 14 projects have been proposed for Canada's West
Coast, where LNG would be exported to Asian markets including
China, whose insatiable appetite for the super-chilled fuel has
boosted prices and buoyed the industry in the past year.
One of the largest of those projects is LNG Canada, a C$40
billion ($30 billion) export terminal in Kitimat, British
Columbia, which is expected to make its FID before the end of
the year.
LNG Canada is a joint venture between Anglo-Dutch giant
Royal Dutch Shell Plc RDSa.L , Malaysia's Petronas PETR.UL ,
PetroChina Co Ltd 601857.SS , Mitsubishi Corp 8058.T and
Korea Gas Corp 036460.KS .
($1 = 1.3126 Canadian dollars)
(Reporting by Sabina Zawadzki; Editing by Elaine Hardcastle)
((sabina.zawadzki@thomsonreuters.com; +44 207 542 4051;))