Canada’s Pieridae Energy Ltd disclosed on Monday, July 13 that KBR Inc will not provide a fixed-cost contract to the Goldboro LNG export plant project. The American engineering company is planning to build the Pieridae’s Goldboro LNG export plant in Nova Scotia, and the energy firm is still exploring the legal options. Pieridae had also disclosed the decision in delaying making a final investment decision to build the $10 billion project until Sept 30.
KBR said in June that the company planned to exit most energy projects, including LNG. Pieridae’s chief executive, Alfred Sorensen said that the company is looking at all the options to establish the most appropriate steps including discussion with legal counsel. The moves are made in the facts that KBR’s decision to no longer accommodate a fixed-price contract, and such act is against its obligation under terms in the agreement signed on March 27, 2019.
Pieridae is one of North American companies delaying projects of LNG export plants as global gas prices sink very low as the market oversupplied in 2019, then inclined to a record lows in 2020 when global pandemic hits. The Goldboro plant is designed to produce LNG almost 10 million tons/year, or about 1.3 billion cubic feet/day. The company has 20-year agreement to German utility Uniper SE, complying to sell all of the LNG production from the first liquefaction train at Goldboro, around 5 million tons/year, from Nov. 30, 2024 to May 31, 2025. Uniper has been said to agreed in extending the deadline to June 30, 2021, and the construction of Goldboro plants is expected to take 56 months.
