Goldboro LNG project 'would be difficult' without federal funding, says Pieridae

·6 min read
If it goes ahead, the $13-billion Goldboro LNG plant would be built here, in Goldboro, N.S. (Pieridae Energy - image credit)
If it goes ahead, the $13-billion Goldboro LNG plant would be built here, in Goldboro, N.S. (Pieridae Energy - image credit)

The company behind a proposed $13-billion liquefied natural gas plant on Nova Scotia's Eastern Shore has seemingly requested nearly $1 billion from the federal government to support the project.

Details of Pieridae Energy's apparent plan to request the money are contained in a PowerPoint presentation dated Dec. 16, 2020, that was leaked to an environmental group last month.

"This is a pivotal meeting today," reads one of the slides from the presentation materials. "We hope to have a roadmap toward defining federal and provincial government financial support.

"Due to COVID and the inability to raise funds in the current state of energy markets in Canada and the U.S., government financial support is critical to moving the project forward."

A couple of slides later comes the pitch: $925 million as a grant, repayable contribution or loan guarantee, broken down into staggered payments tied to pre-determined milestones.

Pieridae spokesperson James Millar said he can't confirm the validity of the document, but in an interview, he touched on many points raised in the PowerPoint slides.

Millar confirmed the company is currently in talks with the federal government about financial support.

"But since we're in negotiations, I can't speak to details on any dollar amount," he said.

Pieridae Energy is proposing to liquefy natural gas from the Maritimes and Northeast Pipeline at a plant to be built in Goldboro, Guysborough County, and ship it by sea.
Pieridae Energy is proposing to liquefy natural gas from the Maritimes and Northeast Pipeline at a plant to be built in Goldboro, Guysborough County, and ship it by sea.(Pieridae Energy)

He also wouldn't say who in Ottawa the company is negotiating with, or what exactly the money would be used for.

If it comes to fruition, Pieridae's project would see the company bring natural gas from Alberta to Nova Scotia through pipelines. The gas would then be liquefied and stored at the Goldboro LNG plant before being shipped overseas to Germany and then to other Western European countries.

Millar said the company has approached the federal government for funding because the capital markets for the energy industry have dried up, in part due to the regulatory hurdles for pipelines.

But time is of the essence.

Pieridae needs to get confirmation of assistance from Ottawa "in the next couple of months," because the company must make a final decision whether to proceed with the project by the end of June.

"We need to deliver first gas to Germany by the end of 2025, beginning of 2026," Millar said. "So if you back things up in order to deliver that first gas, we have to start construction on the ground in Nova Scotia this summer because it's a 54-month process to build the facility."

Asked whether the project could proceed without federal investment, Millar said, "We'll have to cross that bridge when it comes. It would be difficult based on the current climate."

Questions about financial footings

Ken Summers, a Hants County resident who works with the anti-fracking group NOFRAC, received the PowerPoint presentation from an anonymous source.

"It's preposterous," he said of $925 million figure. "That's the very riskiest investment anybody will ever make in this project.… And when they get this money, that won't assure by any means that the project goes forward. It just means they can keep trying to get the other $10 billion."

Summers and NOFRAC, along with environmental groups in Quebec, New Brunswick, Alberta and Germany, sent a letter last week to the prime minister and 18 other federal and provincial politicians to share their concerns about the project.

The letter questions the stability of Goldboro LNG's other financial backers.

The German government has reportedly given a loan guarantee to Pieridae for $4.5 billion, but correspondence from the German department of Economic Affairs and Energy to the letter signatories shows the government has only issued a legally non-binding letter of interest, but it has not approved a loan and support is not guaranteed.

Ken Summers stands next to a wellhead for an exploratory natural gas well near his home not far from Noel, N.S. Summers is part of an environmental group and received the leaked document.
Ken Summers stands next to a wellhead for an exploratory natural gas well near his home not far from Noel, N.S. Summers is part of an environmental group and received the leaked document.(The Canadian Press/Andrew Vaughan)

Germany's Federal Ministry for Economic Affairs and Energy did not respond to CBC's request for information this week.

Millar said the company has "confirmation of eligibility in principle of an untied loan guarantee of up to US$4.5 billion from the German government."

Another source of future financial support for the project is the German company Uniper, which has a 20-year contract to receive five million tons of liquefied natural gas from Goldboro LNG.

"The contract is the start of a long-term project with several important milestones still to be achieved by Goldboro LNG during the development phase," a Uniper spokesperson told the CBC in an email.

The letter from Summers and the other groups to the politicians says if other investors do not materialize, "Canada would lose all the funds it advanced, perhaps becoming the new owners of a massive denuded site in Goldboro, Nova Scotia. Truly a bridge to nowhere."

Pipeline problems, climate concerns

Summers said he has logistical concerns about how Pieridae plans to get the gas from Alberta to Nova Scotia. While the company says it will use existing pipelines, Summers says some of those pipelines are already running at near capacity, and the quantity of gas Pieridae would need to bring to Nova Scotia exceeds those pipelines' capacities by six times.

The company would need to twin existing pipelines, Summers said, facing years of potential obstacles amid tightened pipeline approval processes in both Canada and the U.S.

Millar said while some parts of the pipelines Pieridae would use are "pinch points" that would require parallel pipes, much of the pipeline is running under capacity right now.

In addition to financial and logistical concerns, the letter signatories also question whether the company has adequately consulted with Mi'kmaq bands in Nova Scotia, and how the project will affect both Canada's and Nova Scotia's climate change goals.

Summers says the project would "destroy what chance we have with climate change goals."

The PowerPoint says the project could meet net zero targets through sourcing low-emissions gas, reducing emissions at the Goldboro plant, purchasing offsets and carbon sequestration projects in Alberta.

Lobbying efforts

According to the federal lobbyist registry, Pieridae has lobbied staff in several departments, as well as several MPs.

As recently as Feb. 4, a consultant representing Pieridae lobbied policy advisers with the federal department of Innovation, Science and Economic Development about "securing federal support" for the Goldboro LNG project, and about "securing federal recognition of the reconciliation, climate change, and job benefits" of the project.

In January, the same issues were the topic of lobbying with Finance Canada.

Though the PowerPoint presentation is dated Dec. 16, there are no records in the lobbyist registry of lobbying taking place on that day.

However, there is a record of Pieridae consultant Luka Stevanovic lobbying MP Mike Kelloway on Dec. 17 about regional development, Aboriginal affairs, economic development, industry, energy, infrastructure, employment and training, internal trade, international relations, climate, environment, taxation and finance and transportation — all issues that come up in the PowerPoint presentation.

The CBC contacted five MPs who have been lobbied by consultants representing Pieridae.

Sean Fraser, the MP for Central Nova, was not available to speak with a reporter; Sean Casey, the MP for Charlottetown, said through a constituency office staff member that he didn't know enough about the project to comment; and Cape Breton-Canso MP Mike Kelloway, Halifax West MP Geoff Regan and South Shore-St. Margarets MP Bernadette Jordan did not respond to a request for an interview.

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