Axpo Signs Term Sheet with Canada's Pieridae (Update)

(Updates to clarify just one term-sheet)

Swiss utility group Axpo in May entered into a term-sheet with Canadian-based Pieridae Energy for LNG supplies from the latter's planned Train 2 at Goldboro for sale to Europe, but has not said how much it would buy.

Pieridae wants to build a 10mn mt/year project at Goldboro (two trains of 5mn mt/yr each). It signed a 20-year contract to supply Germany's Uniper five years ago from T1 but now needs buyers for T2.

Axpo said August 16 the term-sheet with Pieridae represents "an important milestone for Axpo's strategy to build a longer term and more diversified global LNG portfolio."

The contract is scheduled to begin from the start of commercial deliveries, estimated to be in 3Q 2023, and last for a ten-year period. However Axpo on August 20 declined to tell NGW how much it is planning to offtake – despite some reports circulating that it could be 2.5mn metric tons/yr – saying that until a firm SPA is signed, the final volume is a matter for negotiation.

"Long-term contracted LNG in Axpo's growing natural gas portfolio, which includes long-term natural gas supplies and a 5% share in Trans Adriatic Pipeline (TAP) as well as sales channels in most European countries, is a natural development and a strategic goal for us," says Domenico De Luca, head of Axpo Trading AG and member of Axpo Holding's management board. "With this contract, Axpo further diversifies its supplies and cements its LNG ambitions. It supplements the current shorter-term focussed global LNG portfolio which last year physically supplied 1.2mn mt/yr."

A spokesperson for the Swiss company told NGW August 20 that the 1.2mn mt/yr supplied by Axpo last year, sourced from various suppliers, was "mainly into Asia... our focus is on Asia." He added that Axpo has import capacities booked at European LNG import terminals but declined to say at which ones. 

Pieridae has yet to take a final investment decision on either of its two liquefaction trains although analysts suggest this may not now be far off.

Axpo is wholly owned by various cantons in northeastern Switzerland, close to its headquarters in Zurich. Its main rival Alpiq is part-owned by French power giant EDF.