Pieridae Lands More German Financing for Goldboro LNG
Pieridae Energy said October 29 it had secured an additional US$1.5bn in loan guarantees from the German government, further advancing its 10mn metric tons/year (mt/yr) Goldboro LNG project in Nova Scotia.
“This confirmation not only satisfies a critical condition leading to the completion of Pieridae’s acquisition of Ikkuma Resources as contemplated by the arrangement agreement entered into between the company and Ikkuma on August 23, 2018, but also marks an important milestone in advancing the integrated Goldboro LNG project towards a final investment decision,” Pieridae said in a statement.
The latest loan guarantee is related to the proposed financing of conventional upstream gas development – the German government does not want to be tied to fracking associated with unconventional gas development, and all of Ikkuma’s western Canadian gas reserves are in conventional reservoirs – and is in addition to the US$3bn of prospective loan guarantees from the German government related to the financing of the first of two LNG trains at Goldboro.
The terms and conditions of both loan guarantees have yet to be negotiated in the context of overall project financing, Pieridae said. Since the UFK program, under which the guarantees will be advanced, is designed to enhance Germany’s energy supply security, the actual grant of the guarantees will be subject to a commitment to deliver and regasify a specific volume of LNG from Goldboro to Europe over a period of at least 20 years. In 2013, German utility Uniper entered into a 20-year agreement to purchase about 5mn mt/yr from Train 1 of the Goldboro facility, while earlier this year Swiss utility Axpo signed a term sheet with Pieridae for an undisclosed volume of LNG from Train 2.
“We are extremely pleased with the additional support that Pieridae is eligible to receive from the German federal government in regard to the proposed Goldboro LNG facility and its integration with upstream natural gas development,” Pieridae CEO Alfred Sorensen said. “This latest announcement from the German government advances our objectives of completing the company’s acquisition of Ikkuma and reaching a positive financial investment decision for the integrated Goldboro LNG project.”
Pieridae is awaiting its final construction permit for the Goldboro terminal, expected imminently from the Nova Scotia Utilities and Review Board (NSUARB). That process hit a snag in September when the board set a public hearing for October 15 to consider a complaint from a Nova Scotia First Nation that it had not been consulted about the project. That First Nation subsequently withdrew its complaint before the public hearing, clearing the way for the NSUARB to ratify a recommendation from Lloyd’s Register North America, its certifying authority, that a permit to construct, with conditions attached, could be issued.