Why one expert has his doubts about LNG export ambitions on the East Coast
IT’S FAIR TO SAY Dulles Wang is skeptical about the chances of Pieridae Energy Canada building a liquefied natural gas export terminal in Nova Scotia. “Wood Mackenzie remains cautious about this project,” says Wood Mackenzie’s research director for Americas gas research.
That cautiousness comes despite some positive steps made by the Calgary-based company to advance its Goldboro LNG project in 2018. In late August, Pieridae announced it had struck a deal to buy Ikkuma Resources Corp., thereby acquiring approximately 100 million cubic feet per day of natural gas.
Getting access to the natural gas it needs to feed into its liquefaction facility is one of the major challenges Pieridae must overcome to get the project built. The Ikkuma production, plus reserves it can exploit in the future, is a good start—but not nearly enough to meet the facility’s needs.
“The purchase of Ikkuma begins the final steps to reaching the final investment decision, which along with our partners will ensure Canada has the opportunity to export its resources to international markets,” Pieridae CEO Alfred Sorensen said in a press release announcing the deal.
But whether those resources are exported via Goldboro LNG remains to be seen. The terminal would ship 10 million tonnes of LNG annually and could cost between US$7-10 billion to build. However, Wang says it still needs to secure more natural gas to meet the needs of the proposed terminal. It also must find pipeline space to get the gas to the Goldboro site.
Another problem for Pieridae is Western Canadian producers may not be as keen to send additional gas to the East Coast as they were a year ago. Wang says over the past six-to-eight months there has been “tremendous momentum” with Shell’s LNG Canada project after it was delayed in 2016. The massive $40-billion project would export as much as 26 million tonnes of LNG to Asia. If built, it gives producers a much closer option to export their natural gas than Goldboro LNG. |