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What goes on in Poland on the 5th of July.
PKN Orlen holds shares in the project of the LNG export terminal in Canada on the east coast. Although the project is being carried out, PKN Orlen is cooling emotions by stressing that it is a minority shareholder, and that it is currently obtaining financing necessary to implement the project. The potential directions of raw material supplies from the terminal are secured.
PKN Orlen, through its daughter’s company – Orlen Upstream Canada – owns shares in the company Pieridae Energy, which is the operator of the construction of the Goldboro LNG export terminal in Nova Scotia. The project is located on the east coast of Canada and has been added to the PKN Orlen portfolio along with the acquisition of Kicking Horse Energy by Orlen Upstream Canada at the end of 2015.
Orlen is waiting
PKN Orlen currently has 7,4 percent of shares in Pieridae Energy and is a minority shareholder. Their reduction from the level of 10,7% was due to the acquisition in 2017 by Pieridae Energy of a prospecting company Petrolia Inc., registered and operating in the province of Quebec.
Goldboro LNG is an integrated project covering the entire chain – from gas extraction to its export. The project was approved by the following regulators: the Canadian (The National Energy Board) and the US (The Department of Energy), which are necessary for the construction of an export terminal.
– Although Goldboro LNG already has the most important regulatory permits, it is still at a very early stage of implementation. Preparatory works are underway, based on which an investment decision will be made. Currently, financing is needed to complete the project. The potential directions of raw material supplies from the terminal are also secured – argues PKN Orlen, asked by BiznesAlert.pl.
– PKN Orlen constantly monitors the status of ongoing work in the Goldboro LNG project. Depending on the progress, appropriate steps will be taken. Currently, PKN Orlen is working on updating the strategy for 2018-2022 – writes the press office of the concern.
Plans
In September last year, Pieridae Energy raised $50 million to complete the next phase of the Goldboro LNG project in Canada. The funds were to be used to implement environmental conditions for development and to undertake engineering works necessary to determine the final cost of the project. They were to convince shareholders to make an investment decision regarding the construction of the only export LNG terminal on the east coast of Canada. PKN Orlen, which is a shareholder in the project through subsidiaries, speaks about its outlook with reserve.
Pieridae Energy is implementing the Goldboro LNG project in Nova Scotia. It is to be completed in 2021, and its capacity is to amount to 10 million tons per year. The infrastructure is to consist of three tanks. The costs are estimated at 7,3 billion dollars. The German Uniper has already committed to acquire the first LNG cargo from Goldboro, at amount of 50 percent of its capacity. Initial bandwidth, based on a 20-year contract with a take-or-pay clause.
No fracking problem for the project
The problem for the project, according to representatives of Pieridae Energy, may be Canadian barriers. In particular, it is the province of New Brunswick, where there is considerable gas resources, but the local authorities do not allow the use of hydraulic fracturing. According to Pieridae Energy, this ban is the Achilles’ heel of the project. An alternative to gas production on the spot, near the export terminal, are gas pipelines from the north of the USA, where the largest shale formation Marcellus is located.
Pieridae Energy is also looking for attractive mining sites that would become a resource base for the planned Goldboro LNG terminal in the east of Canada. It is a deposit in the western part of the country or in the American Marcellus formation in the United States.
