The future of a proposed liquefied natural gas export scheme in eastern Canada is looking highly uncertain after the project proponent admitted to both cost and schedule challenges.
Toronto-listed Pieridae Energy has been touting the Goldboro LNG project in Nova Scotia for some time, and in 2020 signed a services agreement with US player Bechtel to review its scope and design, before submitting a price — by 31 May this year — to build the 10.4 million tonnes per annum facility.
The operator’s aim had been to sanction the project by the end of last month.
However, on 2 July, Pieridae chief executive Alfred Sorensen said the company is plotting a new road for the two-train Goldboro LNG scheme which, in its current guise, he called “impractical”.
Today, the company’s chief financial officer Rob Dargewitcz also quit, with Pieridae at pains to stress his departure “is not related to any issues or disagreements regarding Pieridae’s financial disclosures or accounting policies and practices”.
Speaking about Goldboro, Sorensen said that “as of 30 June we have not been able to meet all of the key conditions necessary to make a final investment decision".
"Following consultation with our board, we have made the decision to move Goldboro LNG in a new direction,” he added.
He did not specify what this means, stating only that the project’s fundamentals remain strong, with “robust LNG demand from Europe and high global LNG prices, indigenous participation, a net-zero emissions pathway, and support from jurisdictions across Canada”.
However, Sorensen remarked that Pieridae has yet to find a partner for the LNG scheme, stressing that it has “become apparent that cost pressures and time constraints due to Covid-19 have made building the current version of the project impractical”.
He said that the company will now “assess options and analyse strategic alternatives” that could make an LNG project “more compatible with the current environment”.
In addition, said Sorenson, Pieridae will further optimise the operation and development of its extensive resources and midstream assets in the Canadian Foothills play of British Columbia, including a carbon capture and storage proposal.
Gas from these assets — currently producing some 215 million cubic feet per day — has been earmarked as feedstock for the Goldboro facility.
Last year, Pieridae said Bechtel would develop a comprehensive engineering, procurement, construction and commissioning (EPCC) execution plan by 31 March, 2021, with the US contractor to submit a final, lump-sum turnkey EPCC contract price proposal by 31 May.
Pieridae’s stock price has been on a calamitous downward trajectory for 10 years, according to data from the Toronto Stock Exchange.
In 2011, its share price hit the giddy heights of more than C$28 (US$22.6), but is currently standing at just 40 cents.
On 2 July, it dropped from 53 cents to 38 cents before finding limited traction in afternoon trading.