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Canada's Pieridae to evaluate options to support proposed LNG plant

07/02/2021 | 10:20am EDT

(Reuters) -Canadian energy company Pieridae Energy Ltd will evaluate options for its proposed Goldboro liquefied natural gas (LNG) export plant in Nova Scotia, as pandemic-led disruptions made the current version of the project impractical.

The company said on Friday it had not been able to meet key conditions necessary to make a final investment decision (FID) on the $10 billion project. Previously, the company said it planned to make that FID by June 30.

"It became apparent that cost pressures and time constraints due to COVID-19 have made building the current version of the LNG project impractical," Pieridae's CEO Alfred Sorensen said in a statement.

Pieridae did not detail the alternatives it was exploring, but said there was still robust demand for the super-chilled fuel from Europe and high global LNG prices.

In 2020, coronavirus demand destruction limited LNG trade to 356.1 million tonnes, up less than 1% from the prior year, according to the International Gas Union. That compares with annual growth of 11-12% from 2017-2019.

Analysts said they expect global demand to grow at just 3-5% between 2021-2025.

Pieridae is one of more than a dozen North American LNG developers that have repeatedly pushed back decisions to start construction primarily due to a lack of long-term deals needed to finance the multi-billion dollar facilities.

Pieridae, however, has a 20-year agreement to sell LNG from Goldboro's first liquefaction train to German utility Uniper SE.

Other developers that have recently delayed decisions to start building their facilities include Sempra Energy on Port Arthur in Texas after failing to seal a deal with Saudi Arabian Oil Co (Aramco).

Several projects, meanwhile, have been put on hold or canceled in recent months, including Annova's Brownsville in Texas, Woodside Petroleum Ltd's Kitimat in British Columbia and Pembina Pipeline Corp's Jordan Cove in Oregon.

(Reporting by Arathy S Nair in Bengaluru and Scott DiSavino in New York; Editing by Shinjini Ganguli, William Maclean)

© Reuters 2021
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