19.10.2016, 18:31
Canada’s Goldboro LNG signs preliminary labor agreement
OREANDA-NEWS. Pieridae Energy has reached a preliminary labor agreement with trade and construction unions for its planned Goldboro LNG export project in the eastern Canadian province of Nova Scotia
The agreement was signed by the Nova Scotia Construction Labour Relations Association, as the bargaining agent of Pieridae, and each union that would provide trade workers. Each union will present the agreement to its respective members for ratification.
Although low oil prices have made it difficult for North American LNG projects to move forward, Goldboro may make a positive final investment decision late this year because it signed a binding long-term offtake contract in June 2013, about one year before oil prices started to plummet.
The 20-year deal is with German utility Uniper for about 5mn t/yr of LNG, equivalent to about 667mn cf/d (18.9mn m?/d) of gas, for delivery to western Europe. The LNG will be priced based on gas prices in western Europe.
The first delivery is scheduled in late first quarter of 2021, Pieridae vice president of project development Mark Brown told Argus today. Pieridae previously said Goldboro would start commercial operations in the first quarter of 2020.
"The final investment decision for the Goldboro LNG project is still potentially planned for the end of this year," Brown said. "Our focus remains on securing key business partnerships and agreements as we move toward making a final investment decision."
The 2013 agreement was signed with German utility Eon, which later created the Uniper unit to take over its hydropower and fossil fuel-fired generation, energy trading and upstream oil and gas business. The spin-off of Uniper from Eon was completed last month.
Goldboro would have up to 10mn t/yr of capacity from two liquefaction trains, but the project has said it could move forward with the first train backed by the Uniper contract. Pieridae has not signed any deals to finance train 2.
Goldboro has said it would use Canadian gas for its first train and US gas for the second. The project has been licensed by Canadian and US regulators to export gas produced in either country.
Dozens of LNG export projects have been proposed in Canada, but none has made a final investment decision because of competition from cheaper US projects and low oil prices. The economics of LNG export projects in the US and eastern Canada are based on a wide differential between North American gas prices and global oil prices, as many existing long-term LNG contracts are linked to oil prices.
The agreement was signed by the Nova Scotia Construction Labour Relations Association, as the bargaining agent of Pieridae, and each union that would provide trade workers. Each union will present the agreement to its respective members for ratification.
Although low oil prices have made it difficult for North American LNG projects to move forward, Goldboro may make a positive final investment decision late this year because it signed a binding long-term offtake contract in June 2013, about one year before oil prices started to plummet.
The 20-year deal is with German utility Uniper for about 5mn t/yr of LNG, equivalent to about 667mn cf/d (18.9mn m?/d) of gas, for delivery to western Europe. The LNG will be priced based on gas prices in western Europe.
The first delivery is scheduled in late first quarter of 2021, Pieridae vice president of project development Mark Brown told Argus today. Pieridae previously said Goldboro would start commercial operations in the first quarter of 2020.
"The final investment decision for the Goldboro LNG project is still potentially planned for the end of this year," Brown said. "Our focus remains on securing key business partnerships and agreements as we move toward making a final investment decision."
The 2013 agreement was signed with German utility Eon, which later created the Uniper unit to take over its hydropower and fossil fuel-fired generation, energy trading and upstream oil and gas business. The spin-off of Uniper from Eon was completed last month.
Goldboro would have up to 10mn t/yr of capacity from two liquefaction trains, but the project has said it could move forward with the first train backed by the Uniper contract. Pieridae has not signed any deals to finance train 2.
Goldboro has said it would use Canadian gas for its first train and US gas for the second. The project has been licensed by Canadian and US regulators to export gas produced in either country.
Dozens of LNG export projects have been proposed in Canada, but none has made a final investment decision because of competition from cheaper US projects and low oil prices. The economics of LNG export projects in the US and eastern Canada are based on a wide differential between North American gas prices and global oil prices, as many existing long-term LNG contracts are linked to oil prices.
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