Feb 25, 2022
Feds seek to fast-track LNG project amid Ukraine attack: Pieridae CEO
Building Canada’s pipelines would reduce dependence on Russian gas: Pieridae Energy CEO
The head of Calgary-based natural gas producer Pieridae Energy Ltd. said he’s fielding inquiries from the federal government over how the company’s proposed Goldboro liquefied natural gas (LNG) project could be completed quicker than anticipated.
Alfred Sorensen, chief executive officer of Pieridae, said government officials are mainly interested in the current status of the project and what might be needed to move the project along faster.
“We certainly have been speaking with different departments in how we might be able to find a near-term solution versus a much longer-term solution,” he said.
Representatives from the Natural Resources; Innovation, Science and Industry; and International Trade ministries weren’t immediately available to comment on Sorensen’s remarks.
Sorensen said the project has had a higher profile over the past few weeks, particularly in light of growing tensions between Russia and the U.S. over Ukraine. Those tensions have now escalated into a full-blown attack on Ukraine from Russia, while further concerns are raised about Europe’s dependence on Russian energy supplies.
“We know that Russia is a significant source of natural gas and oil for European partners. And one of the things that we've been doing over the past number of weeks is ensuring that there are alternatives to Russia, not just to make sure that our friends and allies in Europe continue to be able to function their economies and support their people, but to make sure that Putin no longer draws sustenance for his economy,” said Prime Minister Justin Trudeau in a press conference on Thursday.
The Goldboro LNG project has already been significantly scaled down from its original proposal. Originally envisioned as an onshore LNG export facility in Goldboro, N.S., the project is now being developed as floating facility off the coast of Nova Scotia.
The new, revamped project is expected to process 2.5 million metric tonnes of natural gas annually and cost roughly $2 billion. The original facility was estimated to cost as much as $10 billion.
Sorensen said the decision to scale back the project was driven by a number of obstacles including the high operating costs and access to capital.
“I don't think debt is a big issue. It’s very much equity. That has been the problem for the last year, but certainly I think we see most of that really driven by the green movement away from fossil fuels,” he said.
“If we had financial support five years ago, we would be [exporting] today. I do believe that the project still has substantial merit in reducing the amount of dependence on Russian gas and this is one of the principal reasons I think we've seen a revived interest.”
Another roadblock has been a lack of pipelines connecting Alberta to Eastern Canada.
However, Sorensen said that renewed regulatory efforts to resolve natural gas transport issues and better access to capital could mean that the project could grow to meet European demand.
“We are producing over 200 million [cubic feet of natural gas] a day right now. We think that we can easily move to 400 million, which is the current size of our current project," he said.
"If there was additional interest to resolve some of these pipeline issues, we could very easily go back to the five metric tonne project, which is roughly about 800 million [cubic feet of natural gas] a day. And just to put that in a bit of context, that's roughly about 10 per cent of German daily demand.”