Pieridae eyes $1.6B loan fund for project

CALGARY • Pieridae Energy Ltd., the company with ambitions to build a $10-billion liquefied natural gas project in Nova Scotia, will apply for funds under Ottawa’s recently announced $1.6-billion loan program as it inches closer to a final investment decision.

Pieridae president and CEO Alfred Sorensen said the company is currently working to raise the funds to build the Goldboro LNG project, and hopes to announce a final investment decision in the first quarter if successful. The company had previously expected to proceed with the project by the end of 2018, but that has been pushed back.

The Calgary-based company, which already has loan guarantees from the German government, has been in separate discussions with the Alberta and Canadian governments on funding and will apply for a chunk of the $1.6-billion aid package recently announced by Natural Resources Minister Amarjeet Sohi.

Meanwhile, a report commissioned by the Alberta government and published this month on improving the fortunes of its natural gas industry recommended the province invest directly in an LNG project.

The province announced it had formed an LNG investment team on Dec. 11, but an official was not able to confirm discussions with Pieridae.

“I think the federal program is better defined and fits what we’re able to do,” Sorensen said, noting his project does diversify markets for Canada’s natural gas so it accomplishes what the loan program set out to do.

The company has completed all other technical requirements necessary to build the project and expects to spend most of January in discussions on raising money through its banker Morgan Stanley.

“All of the other pieces of the puzzle are now complete,” Sorensen said.

The recent downturn in equity markets has added a new challenge for the company, which plans to ship natural gas from across the country to be liquefied on the East Coast, before export to Europe.

“The capital markets aren’t only difficult in Canada, they’re difficult in the

THE CAPITAL MARKETS AREN’T ONLY DIFFICULT INCANADA.

U.S. for a Canadian company as well,” Sorensen said.

As a result, Sorensen said the company is currently focused on trying to raise capital in Europe.

European Union countries imported 5.1 billion cubic feet of liquefied natural gas per day in 2017, which marks a steady increase in LNG imports over the last three years, primarily from Russia and Algeria.

Sorensen said European buyers are keen to diversify their markets away from Russia.

A report from Rystad Energy released Dec. 19 also shows more LNG buyers are signing long-term contracts with suppliers, a reversal of trends in recent years, which bodes well for developers such as Pieridae that are seeking long-term buyer commitments before investing billions of dollars.

The report showed that LNG contract volumes in long-term sales agreements were up 38 per cent to 16.5 million tonnes per annum in November compared with the same period a year earlier.

“We expect LNG buyers to continue to seek flexible contracts, but that the large established Asian buyers — such as Japan, South Korea, Taiwan and China — will continue to rely on longterm contracts to ensure security of supply,” Rystad senior analyst Sindre Knutsson said in a release.