Thursday, June 13, 2024

Land-based project back on the table for Goldboro LNG

  • May 18 2022
  • By Corey LeBlanc    

GOLDBORO – Sparked by the federal government’s increasing interest in Canadian energy options to help address European needs, proponents of the Goldboro LNG project have a renewed focus on their original plan to construct a land-based liquefied natural gas (LNG) facility in Guysborough County.

Alfred Sorensen – CEO of Calgary-based Pieridae Energy Limited – tells The Journal that a decision on what makes “most sense,” when it comes to the size of the land-based option that they will pursue will hopefully be made by the end of May.

“It reignited the conversation,” he said in a May 15 phone conversation with The Journal of the continuing global geopolitical situation, which he offered has served as the “impetus” for the federal government’s interest.

Earlier this month, in an interview with Reuters, Jonathan Wilkinson – Canada’s natural resources minister – confirmed that his government has been speaking with not only Pieridae Energy officials, but also representatives of Repsol – a Spanish company that owns an LNG import facility in Saint John.

With Russia’s invasion of Ukraine, Sorensen said that things have “changed significantly,” when it comes to potential energy projects – such as theirs – as several countries, including Canada, are exploring ways to “alleviate some of the leverage” Russia has been exerting as part of its invasion, particular on nations that rely on Russian energy resources.

Last summer – with a self-imposed decision deadline looming – Pieridae officials pulled the plug on its original plan, later announcing it would explore a smaller-scale and less expensive floating LNG project. At that time, they touted the alternate option for its ability to drastically reduce greenhouse (GHG) emissions – noting its use of clean, electric-driven turbines – along with an estimated substantial reduction in capital costs.

“It became too big for Pieridae without a partner,” Sorensen recalls of the decision to shelve its land-based plan.

An estimated 75 to 80 per cent smaller than its onshore option, the floating one would create a much smaller footprint on the 265.6 acres of land that it purchased in Goldboro Industrial Park from the Municipality of the District of Guysborough (MODG) in the fall of 2015 for $3.2 million. As an example of the differences, the original land-based option included a lodge-type complex that could accommodate up to 2,500 workers during the construction phase, while the offshore option would only require housing for the 100 to 150 staffers hired for its day-to-day operation.

The original Goldboro LNG project – on land – included construction of a natural gas liquefaction plant, along with facilities for the storage and export of liquefied natural gas (LNG), including a marine jetty for loading.

The company estimated that the facility would produce approximately 10 million metric tons of LNG annually, with an on-site storage capacity of 690,000 cubic metres.

When it comes to what ingredients will be part of a new land-based plan, Sorensen agreed it would be determined by the coming decision on the size of their land-based proposal.

No matter what approach is on the table moving forward, Sorensen cautioned that a facility such as Goldboro LNG “can’t just appear overnight.” Although Pieridae has many of the pieces of the puzzle in place – such as permits and approvals – he explained production, at the earliest, would begin in January 2027.

With the renewed federal interest – including their search for options that provide high-level production – Sorensen said it “makes sense” to reconsider the land-base option.

“It is not as easy as adding more barges,” he notes of the possibility of increasing capacity as part of the floating LNG avenue.

Whatever option is selected, Sorensen said the federal government will have to “help us cross the finish line,” when it comes to making it happen.

Although his company has offered ideas on helping to finance the project, which he declined the discuss, the CEO added that his company has not asked for a “direct investment” from the federal government.

When it comes to what the federal government can do to expediate the process, Sorensen offered that the “more important piece of the puzzle” is to help facilitate pipeline access to the east coast from western Canada.

He noted that there are a variety of “interlinking issues” – such as securing a new engineering, procurement, construction and commissioning partner; and aspects of First Nations reconciliation – that need to be dealt with, but Sorensen said that from a federal perspective, pipeline access is the key component.

In an email requesting an interview with Minister Wilkinson, The Journal also included a list of questions for Natural Resources Canada officials that covered topics such as an overview of their discussions of Pieridae; a timeline for getting projects launched, if one of the east coast options is selected; and if one or both projects are on the radar.

“Ultimately, project investment decisions will be made by proponents based on their ability to comply with federal and provincial regulatory standards, while competing within the global market,” said Miriam Galipeau, Natural Resources Canada communications advisor, in response. “Increasingly, consumers are looking to source energy products produced with the lowest possible carbon intensity and the ability to meet those expectations will determine the success of proposed projects.”

Galipeau also stated: “Canada is committed to exploring options to enhance the energy security of our allies, however, our expectation is that projects must fit within the context of our existing domestic and international climate commitments.”

Any LNG projects would have to meet “performance standards for emissions intensity, leveraging production techniques like electric drive technology for liquefaction processes, powering facilities with clean electricity, deploying carbon removal technologies where necessary and future proofing investments with low-carbon hydrogen enabled infrastructure to meet Europe’s request for additional sources of clean energy,” she said.

“Proponents should build ‘energy transition’ considerations into project design, such as plans to add hydrogen production and export capacity to meet growing hydrogen demand.”

Project proponents will be required “to demonstrate that exports from these facilities will be used to displace higher emitting energy sources like coal, unabated natural gas, resulting in no net-new global emissions from their consumption,” Galipeau said.

“Time is of the essence,” Sorensen offered of the decision-making process moving forward.

One thing he guaranteed is that his company will not be constructing a land-based facility “on our own.”

“It almost bankrupted it us,” Sorensen said of their initial pursuit of that option.

“We are in a much better place now, and we plan to stay there.”