Axpo interested in building LNG terminal on East Coast
Axpo, a Swiss utility and energy trader, said on Thursday it was in talks with a Canadian company planning to build a liquefied natural gas (LNG) terminal on the country’s East Coast for a 10-year supply deal.
According to Reuters, if the talks lead to a Sales and Purchase Agreement (SPA), they would help boost the chances of the $10 billion Goldboro project being built by Pieridae Energy to become the first LNG export terminal on Canada’s East Coast.
Canada is rich in oil and gas but has yet to export LNG to Asia from its West Coast or across the Atlantic from its East Coast in commercial quantities despite major companies planning 20 export terminals.
“Under the term sheet with Pieridae Energy, Axpo will purchase LNG from Train 2 of the Goldboro liquefaction facility and sell it across Europe,” Axpo said in a statement. “The contract is scheduled to begin from the start of commercial deliveries, currently estimated to be in the third quarter of 2023, and last for a 10-year period.”
Pieridae’s Chief Executive Alfred Sorensen told the Financial Post on Tuesday the company was close to taking a Final Investment Decision (FID) on the project next month after spending the past year seeking permits and talking to contractors and buyers.
Five other projects on Canada’s East Coast have also been proposed although initiatives have stuttered in recent years as global LNG prices fell due to an anticipated glut.
Now, although prices are higher, Canada’s LNG would be in competition with exports from new facilities in the United States, which are ramping up to volumes seen as a gamechanger for the global market in years to come.
Another 14 projects have been proposed for Canada’s West Coast, where LNG would be exported to Asian markets including China, whose insatiable appetite for the super-chilled fuel has boosted prices and buoyed the industry in the past year.
One of the largest of those projects is LNG Canada, a $40 billion export terminal in Kitimat, B.C., which is expected to make its FID before the end of the year.
LNG Canada is a joint venture between Anglo-Dutch giant Royal Dutch Shell Plc, Malaysia’s Petronas, PetroChina Co Ltd, Mitsubishi Corp and Korea Gas Corp.