Goldboro LNG project could be revived as floating barge while demand grows for non-Russian gas

The company that abandoned plans for a land-based LNG facility in Nova Scotia's Guysborough County last summer is looking at an alternative option amid demands in Europe for gas from sources other than Russia.

Last summer, the CEO of Calgary-based Pieridae Energy announced a proposed $13-billion liquefied natural gas project in Goldboro, N.S., would not proceed due to cost pressures and problems getting financing.

More recently, however, as countries sanction and seek to isolate Russia in response to its war against Ukraine, interest in sourcing gas from somewhere else has jumped.

Pieridae spokesperson James Millar said in an interview that the company's board decided last summer to keep its options open after walking away from the proposed Goldboro project. The board has since turned its attention to a floating LNG facility in the area as an alternative. The Financial Post first reported the development.

Millar said the company favours leasing a vessel as opposed to commissioning one.

Calls about potential project increasing

In January, as tensions increased around Ukraine, Millar said the company started getting calls about the status of the project and how quickly it could be ready.

Those inquiries have since "ramped up significantly," he said.

The company sees the project as a potential way to provide natural gas overseas for 20 to 30 years, which Millar said "acts as a pushback against the threat of Russia really weaponizing natural gas against Europe by turning off the taps at any time."

The situation has also changed the economics for Pieridae.

Millar said prices are on the rise — well above the former project's break-even price of $8.50 — and potential clients are willing to sign long-term agreements for supply or the company could sell on the spot market.

No more work camp

The land-based project fell through in part because the federal government would not provide an investment of almost $1 billion. Millar said the company still requires a financial partner, but Pieridae is focusing on the private sector to find that support.

The scope of a project using a floating barge would be substantially different from the original concept.

There would not be a need for a 5,000-person work camp, for example, during construction, although Millar said the full-time workforce would be similar — about 150 people. He said the company would build a "small hotel" by the site to provide lodging.

The construction that would be required includes a jetty and a spur of a pipe to connect the vessel to the Maritimes and Northeast Pipeline. While some barges have their own power supply, Millar said Pieridae has talked with officials at Nova Scotia Power about requirements if the barge it leases does not have its own power source.

Must work with cap-and-trade

Gas would be super chilled onboard the floating facility and transferred to tankers that would come alongside. The barge would produce about 400 million cubic feet of gas each day, about half of what the land-based site would have done, said Millar.

Emissions would also be lower using a barge. Millar said the vessel would produce about 400,000 tonnes of greenhouse gas each year, down from the three million tonnes estimated for the land-based site. Even with lower emissions, the project is likely to face opposition from people concerned about what it would mean for Nova Scotia's efforts to hit new greenhouse gas reduction targets by 2030.

Millar said the company would need to understand how it can work with Nova Scotia's cap-and-trade system, although Pieridae will advance the view that the project would be considered net zero when factoring in a carbon capture and storage facility it's planning in Alberta.

Even still, the company would need changes to existing approvals it has from the government. A spokesperson for Nova Scotia's Environment Department said a company with an approved environmental assessment that wants to change the project or propose a different one is required to submit a project description, at which point the necessary regulatory path would be determined.

Municipal council endorses proposal

At a meeting Wednesday, council for the Municipality of the District of Guysborough passed a motion endorsing Pieridae's new proposal.

"I think it's a good project," Warden Vernon Pitts said in an interview. "I thought it was a good project when it was first proposed and I think it's a good project today."

Pitts said he's hoping the removal of the work camp from the project, which was a particular source of concern for some Mi'kmaw chiefs and community groups, might lead to less opposition.

Despite the smaller scale of the proposal, Pitts said there remain lots of potential economic gains for the municipality.