Second EU Utility Eyes Canadian LNG

Canadian east coast LNG project developer Pieridae Energy said late May 7 it has entered into a term sheet to negotiate a binding, ten-year LNG sale and purchase agreement with an unnamed European utility, for up to 1mn metric tons/yr.

The LNG will come from the second train of Pieridae's planned Goldboro liquefaction project in Nova Scotia and scheduled to begin from the start of commercial deliveries, estimated to be 1Q 2023. It would involve supplying Canadian-sourced LNG to Europe, Pieridae added.

It wants to build a 10mn mt/year terminal at Goldboro, Nova Scotia (two trains of 5mn mt/yr each) and is eyeing local offshore conventional gas. But neither train has taken final investment decision (FID) and it is not clear if this could economically compete with US liquefaction projects sourcing cheap shale gas from their home market. Pieridae's ultimate aim might be to supplement offshore feedstock with cheaper shale gas, such as from the Montney play in western Canada, where gas is a by-product of liquids and sold cheaply.

“After having contracted the entire output from Train 1 with Uniper, this agreement moves Pieridae another step closer to the final investment decision on Train 2, which would bring much-needed jobs and other economic benefits to Nova Scotia and Canada,” said Pieridae CEO Alfred Sorensen. “We are seeing a growing interest from utilities in Europe and beyond, for reliable and stable LNG offtakes, that can contribute to increase security of supply as well as diversify price and volume risk in their portfolios,” said Riccardo Bortolotti, Pieridae's managing director of business development in London.

With FID yet to be taken on Goldboro train 1, the 5mn mt/yr contract inked Uniper five years ago in 2013 remains provisional.

Update May 8, 2pm GMT/ 3pm BST:  A spokesperson for Uniper told NGW that, so far as it is aware, Goldboro train 1 has yet to take FID, adding: "The offtake agreement with Uniper Global Commodities is in place and we are pleased to see that the project took another step towards FID."