By CHESTER DAWSON and HENDRIK VARNHOLT
A Canadian energy company
said Monday it reached a deal with major German utility E.ON to
export liquefied natural
gas from a proposed plant on the Atlantic coast of
The multi-billion dollar project is one of several planned
LNG terminal projects designed to export a glut
of North American natural
gas, which has depressed prices on the continent but made
the gas more attractive to overseas buyers.
A handful of big and small energy producers are scrambling to
line up approvals, financing and customers for a number of gas
export projects in both Canada and the
In the deal announced Monday, Pieridae Energy (Canada) Ltd.
said it plans to ship about 5 million tpy of LNG
to Western Europe from a LNG plant it plans to build in
Goldboro, Nova Scotia on Canada's Atlantic coast. The exact
financial terms weren't disclosed, but E.ON said the contract
is worth several billion euros per year.
It marks the first contract for a Canadian LNG
export plant with a major end-user of gas, something that has
so far eluded several proposed liquefaction facilities envisioned for Canada's
Pacific coast, which are geared toward Asian markets.
Pieridae said LNG shipments would start by the first quarter
of 2020, subject to clearing an environmental assessment in
Nova Scotia. The plant will handle a yearly volume of around 10
million tons of LNG, which will be pumped onto ships for
"Our agreement with E.ON provides the economic security
needed to complete the development of the first process train
of the Goldboro LNG terminal," Pieridae CEO Alfred Sorensen
said in a statement.
E.ON's commitment is viewed as an anchor deal that may help
Pieridae convince other buyers to contract for its
still-untested supplies of LNG. For E.ON, LNG
from North American allows it to diversify its gas supply,
which is now concentrated on deliveries from Russia.
Dow Jones Newswires