Swiss company Axpo eyes 10-year deal to buy LNG from new Nova Scotia plant

LONDON Axpo, a Swiss utility and energy trader, said on Thursday it was in talks for a 10-year supply deal with a B.C. company planning to build a liquefied natural gas (LNG) terminal in Nova Scotia.

A sales and purchase agreement would boost the chances that Pieridae Energy would decide to build the $10-billion Goldboro project, which would be the first LNG export terminal on the east coast.

Canada has lots of oil and gas but has yet to export major shipments of LNG to Asia from either the west coast or across the Atlantic.

“Under the term sheet with Pieridae Energy, Axpo will purchase LNG from Train 2 of the Goldboro liquefaction facility and sell it across Europe,” Axpo said in a statement.

Deliveries are estimated to begin in the third quarter of 2023.

The Axpo deal is ready to be finalized once Pieridae secures gas supplies from Eastern Canada and the northeastern United States, hopefully within five months, said CEO Alfred Sorensen.

Sorensen declined to identify the size of the Axpo supply agreement. Pieridae already has a 20year agreement to sell five million tonnes annually to German utility Uniper.

Goldboro would produce 10 million tonnes annually starting in 2023 if construction begins by year-end.

Securing financing for such a large project, mainly through offtakes, is a big challenge, however, for a company with a $195-million market cap.

“Are we delusional about how we can get to the finish line? It really has been from the very beginning about how we can work with the Germans and work to improve their energy security,” Sorensen said.

Germany depends heavily on gas imports from Russia and is seeking to diversify its suppliers. Pieridae is finalizing a loan guarantee of at least $3 billion from the German government.

The company is “very close” to securing enough committed sales to make a positive final investment decision, he said.