A Calgary-based company seeking to build a $10-billion liquefied natural gas plant in Nova Scotia is close to a deal to buy natural gas assets to help fill the first phase of its project, according to people familiar with the situation.
Pieridae Energy Ltd., led by Canadian LNG investor Alfred Sorensen, has said it requires more production to anchor the massive export-focused development before making a final investment decision.
Pieridae’s shares were halted on the TSX Venture exchange on Tuesday pending a news release from the company. An announcement on a deal could be announced as early as Wednesday, said the people, who spoke on condition of anonymity because they were not authorized to speak publicly.
The seller of the assets and size of deal were not immediately known.
Pieridae spokesman James Millar declined to comment, other than to say the shares were halted for a material announcement.
In May, Mr. Sorensen said the company was discussing financing options for the development and was in the market for additional Alberta gas supplies.
Such a deal would follow Pieridae’s $94-million acquisition of Alberta gas producer Ikkuma Resources Corp. last year. The company has previously acquired gas assets in Quebec as well.
Pieridae is nearing a decision on proceeding with its Goldboro LNG project, located northeast of Halifax. If it proceeds, it would follow the $18-billion LNG Canada development at Kitimat, B.C., led by Royal Dutch Shell. Shell and its partners gave the green light to the project late last year.
As it seeks supply to fill the plant, Pieridae can take advantage of an Alberta gas industry that has faced severe financial pressure due to weak prices and competition in the United States, where Canadian exports have fallen in the past decade. The Sable offshore gas project off Nova Scotia is being decommissioned, prompting Pieridae to seek supply from Alberta.
The company has said it aims to use TC Energy and Enbridge Inc.-owned pipelines to get Alberta gas to the plant. It has the necessary permits and has signed a long-term sales agreement with Uniper, a German utility.
Meanwhile, the German government has stated the company is eligible “in principle” for up to US$4.5-billion in loan guarantees, the company has said.
Still, shares in Pieridae have tumbled 68 per cent this year. They last sold for 86 cents on the TSX-V.
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Jeffrey Jones