Pieridae’s focus on upstream returns 2021 improvement
With its Goldboro LNG project on Canada’s east coast on the back burner for now, Pieridae Energy has turned its attention to developing its upstream assets, and that new focus yielded significantly higher cash flow from operations and adjusted funds flows from operations in 2021, it reported March 24.
“We have transformed as a company in the past year following the completion of our strategic review and the suspension of the Goldboro LNG project,” CEO Alfred Sorensen said. “Pieridae has adjusted its strategy to one of focusing on building the upstream side of our business, while maintaining optionality for an LNG project.”
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He said there is “great value” in developing the Foothills assets acquired from Shell Canada in 2019, and Pieridae now holds one of the largest land bases in the area. Its 2022 drilling program, projected to start in the second half this year, would bring new production, help fill the three gas plants acquired from Shell Canada and lower its unit operating costs.
“We also know we must lower debt financing costs and develop and execute a carbon management plan which is aligned to our environmental, social and governance (ESG) vision,” Sorensen said.
Central to the carbon management plan is the Caroline Carbon Capture Power Complex, a large-scale carbon capture and storage (CCS) and blue power complex at Pieridae’s Caroline gas complex northwest of Calgary. The depleted gas reservoir which would store CO2 emissions from Caroline gas processing and power generation and from third parties, has the capacity to sequester up to 100mn mt of CO2 over the three-plus decades.
“Our goal in 2022 is to conduct an updated feasibility study for the project,” Pieridae said. “If the concept makes sense, it would be a key part of our carbon management plan, which we also aim to develop and deliver this year.”
While developing LNG export capacity at Goldboro in Nova Scotia – now envisioned in a smaller, floating footprint – could be an “economically compelling and nation-building” opportunity, he said the project needs a commitment of support from the federal government confirming it is a national priority.
“If it is deemed to be, then pipeline capacity to transport the gas to the east coast would need to be worked out,” Sorensen said. “We must find an investment partner and also hope the Mi’kmaq remain involved as partners so that they might share in the benefits of a future project.”
Cash flow from operations jumped to C$51.1mn (US$40.8mn) from C$2.2mn in 2020, while adjusted funds flow from operations rose to C$57.7mn from C$26.9mn. Net loss for the year improved to C$39.8mn from C$100.7mn in 2020.
Natural gas production for the year slipped to 199.8mn ft3/day from 201mn ft3/day, reflecting major planned facility turnarounds at Pieridae’s Jumping Pound and Caroline gas plants.