Fuelled by expectations of a ten-times increase in its net operating income, Pieridae Energy plans to invest to advance its proposed Nova Scotia LNG project to a final investment decision next year.
On Thursday the company announced a “pre-FID” capital budget of $32 million for 2020, and a development expense of $16 million for the Goldboro LNG project.
Under a 20-year supply deal with German utility Uniper for 5 mtpa, or half of the capacity of the US$10-billion project, Pieridae is facing a deadline of September 30, 2020 for FID. That deadline was extended earlier this year, from September 30, 2019.
The current timeline targets commercial deliveries starting November 30, 2024 and May 31, 2025.
Pieridae expects to realize net operating income of $80 million to $110 million in 2020, which otherwise would have been approximately $10 million, were it not for the company’s acquisition of Shell Canada’s midstream and upstream assets in the Southern Alberta Foothills for $190 million in October 2019.
Pieridae expects production in 2020 of 40,000-50,000 boe/d, a 230 to 290 percent increase over its Q3/19 exit volumes.
License transfer approval for certain of the acquired Shell assets is pending from the Alberta Energy Regulator.
“A doubling or close to tripling of daily production speaks to the value of the acquisition and provides us with the majority of the gas resource necessary to supply train 1 at Goldboro,” CEO Alfred Sorensen said in a statement.
“It’s Pieridae’s advantage of being an integrated LNG company and not just a gas producer and processor that sets us apart from our peers. Delivering on our stated goals of completing a fixed price contract with KBR and finalizing project financing puts us in a position to make a final investment decision for Goldboro LNG next year. We continue to make progress toward that goal.”