Goldboro LNG Terminal

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Goldboro LNG Terminal is a proposed LNG terminal in Nova Scotia, Canada, which has been shelved. In 2023, the project's sponsor Pieridae Energy announced that it would sell its Goldboro unit.

Location

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Project Details

• Owner: Pieridae Energy 100%
• Location: Goldboro, Nova Scotia, Canada
• Coordinates: 45.182556, -61.645528 (approximate)
• Type: Export
• Trains: 2
• Capacity:
  • Formerly 10 mtpa, 1.43 bcfd (5 mtpa per train), 9.6 mtpa (4.8 mtpa per train)
• Cost:
  • Formerly US$10 billion
• Financing: MUFG Bank is Financial advisor
• Status: Shelved
• Start Year: 2025-2026
• Associated Infrastructure: Maritimes and Northeast Pipeline

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Goldboro LNG Terminal is a proposed LNG terminal in Nova Scotia, Canada, which was shelved in July 2021. The project's final investment decision (FID) was expected in June 2021, although its developers failed to move forward at that date.

If constructed, Goldboro LNG Terminal's gas would be delivered via the existing Maritimes & Northeast Pipeline. The LNG produced at Goldboro LNG project would be shipped to Europe, South America, and Asia.

The facility has secured a binding offtake buyer agreement with the German energy company Uniper of 5 million tons per annum for 20 years. Proponents of the project have reported that the Goldboro project has not faced the same opposition that is common among LNG projects in Western Canada.

In July of 2019, construction of Goldboro LNG was postponed until the end of September 2020.

In May 2020, Alberta's provincial energy regulator declined to approve the sale of extensive gas infrastructure from Shell Canada to Pieridae Energy on the grounds that there were uncertainties over which of the two companies would be liable for subsequent clean up costs following the transfer of the assets. The 284 wells, 66 gas and 82 pipelines in the southern Alberta foothills which Pieridae is attempting to purchase would contribute to supplying the proposed Goldboro LNG terminal. Underpinning the regulator’s verdict on the sale was the intention to prevent more highly expensive energy cleanups in Alberta landing with the region's taxpayers. Shell Canada and Pieridae appeared intent on challenging the decision by the regulator or resubmitting their application.

In July 2020, another indication of the project's precarious future emerged when Kellogg Brown & Root Ltd., the company hired by Pieridae to build the proposed LNG export facility, withdrew from a previous agreement to provide a fixed price contract for the job. Kellogg Brown & Root Ltd. was reported to be prepared to carry out the work but on different terms. Pieridae said it was considering legal action against the construction company and was also in discussion with other potential constructors.

In a May 2021 earnings call, Pieridae Chief Executive Alfred Sorensen remained confident of making FID on the project by the end of June. The company said engineering firm Bechtel Corp plans to deliver a fixed-price proposal to build the plant by the end of May, and that the project would employ about 3,500 workers during peak construction.

In May, Sorensen also revealed that Pieridae is planning the Caroline Carbon Capture Power Complex to help offset the Goldboro LNG project's future carbon emissions, saying that the proposed facility would be able to store up to three million tonnes of carbon per year, roughly equal to the amount of emissions to be produced from the LNG project. The capital cost of the new project remains unclear because a potential partner, due to be revealed shortly, is deciding how big the natural gas-fired power plant will be and that will determine how much carbon can be captured and stored underground.

At the end of June 2021, environment groups opposed to the Goldboro terminal marked the passing of Pieridae's stated deadline for achieving FID and noted "the company's failure to receive the nearly $1 billion in public funds that it had requested from the federal government." Robin Tress, of the Council of Canadians, said: "I'm glad the federal government did not act on Pieridae's request for nearly a billion dollars, and I hope it never does. It is critical that our governments stop supporting and subsidizing fossil fuel energy projects like Goldboro LNG. Instead, governments must invest immediately in renewables and energy efficiency, and in creating a more fair economy based on that shift in our energy system." Federal parliamentarian Sean Fraser said that the federal government had not received a funding application from Pieridae Energy and that there was no "imminent decision" coming. Fraser added that a funding application for Goldboro LNG could not be considered until environmental and regulatory processes have been completed and also commented: "We're trying very hard to move away from the use of taxpayers' money to increase fossil fuel production".

In July 2021, Pieridae announced in a press release that the company had been unable to take a positive FID due to cost pressures and an inability to secure financing, and that the current proposal for Goldboro LNG would be shelved: "Following consultation with our Board, we have made the decision to move Goldboro LNG in a new direction...That said, it became apparent that cost pressures and time constraints due to COVID-19 have made building the current version of the LNG Project impractical...We will now assess options and analyze strategic alternatives that could make an LNG Project more compatible with the current environment."

As of March 2022, amid the ongoing energy crisis in Europe, it was reported that Pieridae was considering rebooting Goldboro LNG as a floating LNG project.

In February 2023, a court decision was overturned that had prevented environmental groups from challenging Goldboro LNG's environmental approval.

In March 2023, CBC reported that Pieridae is still considering a "slimmed-down" proposal for the facility. Pieridae has requested the US government allow it more time to export US-sourced gas into Canada for the project, which would supplement domestic gas from New Brunswick. The government of New Brunswick currently has a moratorium on fracked gas, which would inhibit the project's ability to operate.

In November 2023, Pieridae announced that it would sell its Goldboro unit and associated assets, including licenses and permits, as part of the company's shift away from LNG. The sale is expected to be finished in the first half of 2024. As of this time, without a sponsor, the project was considered shelved.

Pieridae completed the sale of its Goldboro unit in July 2024, selling the property for CAN$12 million.

Coronavirus delay

In April 2020, Pieridae Energy announced that the final investment decision (FID), planned for autumn 2020, for the Goldboro LNG Terminal will be delayed due to depressed global LNG markets and the COVID-19 pandemic. The company's CEO Alfred Sorensen added that it is now in negotiations with German energy company Uniper to extend the FID deadline to June 2021.

First Nations opposition

The Halifax Examiner reported on growing concerns, in the run up to the sanctioning of the project potentially at the end of June 2021, among Mi’kmaq communities in Nova Scotia over what a sudden influx of approximately 5000 construction workers, to be housed in 'man camps', could result in for local communities. Ducie Howe, a Mi’kmaq rights and titleholder of unceded Mi’kma’ki territory, told the Halifax Examiner: "The MMIW&G [Missing and Murdered Indigenous Women and Girls] rates are co-related to Industries that come into another territory to rape and murder and desecrate the lands and Waters. Man camps along with environmental racism breed sexualization and violence against our people ... Temporary jobs or profit over lives are not worth it, especially considering that the rates of crime triple in small towns that have a sudden influx of 5000 workers, and that there has been and is a lack of will to investigate/ prosecute or find the MMIW&G."

Financing

In August 2018, Pieridae Energy announced the appointment of the German export finance bank KfW IPEX-Bank as an advisor on the project. KfW IPEX-Bank's role is to assist the company in finalising a US$3 billion dollar untied loan guarantee for the estimated US$10 billion project from the German federal government under its UFK program (Garantien für ungebundene Finanzkredite). Such a guarantee can be provided by the German government if a German company secures any sort of raw materials and requires money to pay for them. Morgan Stanley and Société Générale are also advisors to the project. In November 2019, Pieridae announced that the German government had offered to increase the financial credit guarantees (UFK Guarantees) for loans up to US$4.5 billion. In May 2020, and despite the highly adverse global market conditions for companies aiming to develop major LNG terminal projects, Pieridae Energy continued to talk up the delayed project's potential, citing the "US$4.5 billion in potential loan guarantees from the German government". A Freedom of Information request submitted by environmental campaigners in January 2020 to Germany's Ministry of Economy received the response that Pieridae has not received a loan guarantee so far, merely a Letter of Intent from the German government.

Pieridae is also lobbying federal and provincial governments in Canada for financial help to build the terminal, and is seeking approximately CAN$1 billion in public handouts.

The project is in pre-FID status. The final investment decision (FID) was expected in June 2021, although the developers failed to move the project forward by this date.

In May 2021, Reuters reported that Société Générale had stepped out of its advisory role for the project as the French bank was taking measures to limit its exposure to shale oil and gas production in North America by 2023. In its place, Pieridae took on the Japanese MUFG Bank in an advisory role. Pieridae was hopeful that the hiring of MUFG, along with new plans for a carbon capture facility at the proposed terminal, would allow for FID to be reached by the end of June 2021.