Pieridae Energy says CEO set to retire

Having all but abandoned hopes for developing its Goldboro LNG project on Canada’s East Coast, Pieridae Energy said June 29 its CEO, Alfred Sorensen, has advised of his intention to retire “shortly”.

“With the completion of the company’s refinancing, which was a key step in Pieridae’s previously announced strategy to improve financial flexibility and reduce leverage, as well as the company’s transition away from its LNG project and renewed focus on its upstream and midstream assets in the Canadian Foothills, Mr. Sorensen has informed the board that this is a logical time to transition the leadership of the company,” Pieridae said in a release.

Goldboro LNG was initially proposed as a 5mn tonnes/year liquefaction project on a site in Nova Scotia that was previously home to the Maple LNG project, a similar facility that already had federal environmental approvals. In 2012, federal regulators determined that, since Maple LNG had already gone through the environmental review process, and in light of the similar nature of the two projects, Goldboro LNG would not require a federal environmental assessment.

The project received provincial environmental approvals in 2013, and the same year struck an offtake agreement with the predecessor company of German gas supplier Uniper for virtually all of the facility’s LNG production.

An option existed to expand the facility with a second 5mn tonnes/year train, conditional on reaching commercial offtake agreements, and in 2018, Pieridae reached an offtake agreement with Swiss utility Axpo for 1mn tonnes/year from a second train.

Loan guarantees from the German government were secured for the project, but Pieridae struggled with securing gas supply. Although the site was relatively close to the giant Marcellus shale gas field in the northeastern US, the German financing guarantee prohibited Pieridae from using “fracked gas”, forcing the company to look to western Canada. 

It acquired Shell Canada’s Foothills assets in 2019 with the intent to develop them to supply Goldboro, but was unable to convince TC Energy to expand its Canadian Mainline gas pipeline from western Canada to provide sufficient capacity to bring the gas to the East Coast.

In early 2021, after a review of its operations, Pieridae downsized Goldboro LNG to a 2.8mn tonnes/year floating LNG facility but missed a contract obligation in its offtake agreement with Uniper to reach a final investment decision by June of that year, giving the German utility the opportunity to walk away from the contract.

Russia’s invasion of Ukraine in early 2022, and the European gas supply disruptions which followed, brought renewed interest in East Coast Canadian LNG prospects, including those for Goldboro, but the optimism soon faded, as neither Goldboro nor any other LNG projects could gain federal support.

By early this year, Pieridae was not even mentioning Goldboro in its quarterly financial reports, choosing instead to focus on developing production from its Foothills assets and pursuing carbon capture and storage (CCS) opportunities.

Now, with Sorensen’s pending retirement, it is clear that LNG is not in Pieridae’s future.

“I am very pleased that the company was able to successfully complete the recent refinancing, which puts Pieridae in a much-strengthened financial position,” Sorensen said in his retirement announcement. “I am excited to see what the future holds for Pieridae.”

During a transition period, Pieridae will continue to be led by Darcy Reding, president and COO, and CFO Adam Gray. The exact date for Soresen’s departure has not yet been finalised, Pieridae said.