Two more LNG projects are poised to proceed
CALGARY Two more liquefied natural gas export projects are poised to proceed in Canada over the next six months, setting up what analysts call “a dream scenario” after years of delays.
Pieridae Energy Ltd.’s $10-billion Goldboro LNG project in Nova Scotia and Woodfibre LNG’s $1.6-billion project in British Columbia are nearing the finish line in a tight race to be the second LNG project, after Royal Dutch Shell Plc and its partners approved the $40-billion LNG Canada megaproject on the west coast earlier this month.
Pieridae expects to receive its construction permits in Nova Scotia this week and close its merger with Calgary-based natural gas producer Ikkuma Resources Corp. in mid- to late November, “with our view that we will make our FID (final investment decision) shortly after that,” CEO Alfred Sorensen told the Financial Post.
The project would mark the first LNG project on the east coast and, if built, allow Western Canadian natural gas production to be exported to Europe.
Sorensen said the company is negotiating a pipeline agreement with TransCanada Corp. to use its existing network, which would need to be expanded.
Woodfibre LNG is nearing a decision that would make it the second LNG project in British Columbia.
“We’re looking for a notice to proceed to construction in Q1 (of 2019),” company president David Keane said.
Keane said the company is working to finalize an impact-benefits agreement with the Squamish First Nation, looking at ways to reduce the project’s costs and seeking relief on anti-dumping tariffs for fabricated industrial components imported from Asia.
“The federal government has been clear that if you get to a position where you need to make a final investment decision and (tariffs are) the last remaining issue, then they would be willing to take a serious look at it, but they would prefer you exercise all other options, which everybody is doing,” Keane said. The company is awaiting a decision on the tariffs from the Federal Court of Appeal.
If both projects proceed as planned, potentially followed by Pembina Pipeline Corp.’s $6-billion Jordan Cove LNG project in Oregon in the second half of next year, it would present a “dream scenario” for Canadian gas and pipelines, National Bank Financial analyst Patrick Kenny said.
Pembina expects the U.S. Federal Energy Regulatory Commission to issue a final environmental impact statement in August 2019 on its project, followed by a permitting decision in November 2019, which would allow the company to “reach our goal of first cargo in 2024,” company spokesman Michael Hinrichs said in an email.
That timeline would set up Pembina’s Jordan Cove LNG to be the third export project for Canadian natural gas to proceed between now and the end of next year.
“It seems like they ’re all inching toward construction,” National Bank’s Kenny said.
It is less clear when Chevron Corp. and Woodside Petroleum Ltd. might proceed with their jointly owned Kitimat LNG project, Kenny said.