Canada’s Pieridae Settles with KBR on Goldboro Work [UPDATE]
Canadian LNG developer Pieridae Energy said August 12 it had reached an agreement with engineering contractor KBR following its decision earlier this year to quit engineering, procurement, construction and commissioning (EPCC) work. The decision left Pieridae’s Goldboro LNG project in the lurch.
“As part of the resolution, Pieridae acquires the right to transition all of KBR’s work product created to date to a replacement EPCC contractor,” Pieridae CEO Alfred Sorensen said. “We are in the midst of discussions with other firms that have expressed strong interest in concluding a lump sum turnkey EPCC contract for the LNG facility.”
During an August 12 conference call with analysts, Sorensen said discussions are ongoing with six potential EPCC providers, four of which are prepared to enter into the kind of lump sum turn key contract that KBR moved away from. Bids from potential providers are due August 14, Sorensen said, and a new contract should be in place by the end of the month.
Pieridae still expects to make a final investment decision on the 10mn mt/yr Goldboro LNG project by the end of June 2021, he added.
Sorensen revealed the agreement as Pieridae Energy released second quarter results showing “solid results quarter after quarter” and strong metrics in revenue, net operating income and daily production. The improvements, Sorensen said, largely reflected Pieridae’s acquisition last summer of Anglo-Dutch major Shell’s Foothills natural gas assets.
“As a result of the Alberta Foothills asset acquisition, revenue was up more than 400% year over year on a Q2 basis, production climbed 185%, and we continued to operate our assets safely and reliably,” Sorensen said.
Progress is also being made for Shell and Pieridae to re-apply to the Alberta Energy Regulator for licence transfers associated with the acquisition, he added.
Net revenue in Q2 2020 increased to C$68.6mn (US$51.8mn) from C$13.1mn. Net operating income rose to C$19.3mn from a loss of C$1.96mn in Q2 2019, and was consistent with net operating income in the past three quarters since the Shell acquisition was completed.
Natural gas sales volumes in Q2 averaged 208.7mn ft3/day, up from 90.9mn ft3/day in the same period a year ago. Sales of natural gas liquids and condensate averaged 9,000 b/d, up from 211 b/d in Q2 2019.