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Pieridae delays Nova Scotia LNG export plant decision due to coronavirus

04/16/2020 | 10:40am EST

Pieridae Energy Ltd said on Thursday it delayed a decision to build the Goldboro liquefied natural gas export plant in Nova Scotia until after Sept. 30 as efforts to curb the coronavirus outbreak cut global economic growth and energy demand.

The Canadian energy firm previously said it expected to make a final investment decision (FID) to build the $10 billion project in the third quarter of 2020, which would allow it to start producing LNG between November 2024 and May 2025.

"Market conditions and the global fallout from COVID-19 have impacted our ability to make a final investment decision (FID) this fall, but we are confident it will happen once conditions improve and we can better analyze the landscape," Pieridae Chief Executive Officer Alfred Sorensen said in the company's fourth-quarter earnings release.

Goldboro will have two liquefaction trains capable of producing a total of almost 10 million tonnes per annum (MTPA) of LNG, or about 1.3 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet of gas is enough to supply about 5 million U.S. homes.

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 starting between Nov. 30, 2024 and May 31, 2025.

Pieridae said it is negotiating with Uniper to extend the FID deadline to June 2021 and believes it will obtain this extension.

Pieridae said it expects construction to take about 56 months and plans to employ about 4,500 workers to build the project.

Pieridae is one of several companies developing North American LNG export plants that have delayed projects as global gas prices dropped to their lowest in years in an oversupplied market in 2019, and plunged to record lows in 2020 as the coronavirus outbreak caused demand to collapse.

In mid-2019, a dozen North American developers, including Pieridae, said they planned to make FIDs by the end of the year. But none of those projects are under construction. All of those FIDs were delayed until 2020 or later.

At the start of 2020, another dozen developers - some from 2019 - said they planned to make FIDs by the end of this year. Currently, however, that total is down to just half a dozen, and analysts said they expect only one or two of those projects to actually go forward this year.

(Reporting by Scott DiSavino; Editing by Chizu Nomiyama, Paul Simao and Dan Grebler)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
PIERIDAE ENERGY LIMITED 5.36% 0.59 Delayed Quote.24.21%
UNIPER SE -1.33% 29.58 Delayed Quote.6.16%
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