Pieridae Energy Canada, the developer of the Goldboro LNG project in Nova Scotia, has signed a 20-year sales agreement to start delivering 5 million mt/year to German utility E.ON in the first quarter of 2020, Pieridae said Monday.
The contract will provide the "European market and Germany particularly with a new secure source of natural gas supply," said Pieridae CEO Alfred Sorenson said in a statement. The LNG pricing is "based on market prices of natural gas in the Western European market," Pieridae said.
The offtake sales agreement for the US$5 billion LNG project was binding, subject to conditions in Pieridae's control, Sean Lewis, a Pieridae spokesman, said in a later e-mail.
A spokesman for E.ON, Georg Oppermann, declined comment beyond the statement.
Pieridae said that in conjunction with gas E&P company Contact Exploration it was engaged in "advanced discussions with North American natural gas suppliers and pipelines, which are expected to be concluded within the terms of the sales and purchase agreement."
The Goldboro terminal is being designed to export up to 10 million mt/year, with on-site storage capacity of 690,000 cu m of LNG, Pieridae said. Once commercial operations start, gas will be transported to Goldboro using existing pipeline systems, it said.
Approval of an environmental assessment application by the Nova Scotia government would set the stage for a final investment decision in 2015 and the start of construction late that year, Pieridae said.
Sorenson said when the proposal was unveiled seven months ago prospective European customers told him they were eager to diversify their supply sources to Atlantic Canada and Quebec.
At the time he said Goldboro would give priority to a "Canadian supply solution, both onshore and offshore," while Contact CEO Steve Harding said Goldboro would advance gas development in Nova Scotia and neighboring New Brunswick.
However, sources in the Nova Scotia government told Platts they understood Pieridae hoped to access Marcellus Shale production in New York and Pennsylvania.
Goldboro is the landfall for Sable production that has fallen to 440,000 Mcf/d from a peak of 500,000 Mcf/d. Encana's Deep Panuke field close to Sable is due on stream this year, targeting 300,000 Mcf/d.
