Pieridae Seeks Natural Gas Acquisitions, CEO Says

Pieridae Energy Ltd, the company behind a proposed liquefied natural gas terminal on Canada's east coast, is looking to buy producing assets in western Canada or in the Marcellus shale play in the United States, its chief executive said on Monday.

 

Alfred Sorensen told Reuters in a phone interview that Calgary-based Pieridae wanted to buy about 200 million cubic feet a day of natural gas production to supply its terminal and would consider buying a company or just assets.

 

Privately held Pieridae is developing the Goldboro LNG project in Nova Scotia, with a targeted in-service date of 2021 and capacity of 10 million metric tonnes a year.

 

"What we really want is a resource with potential to grow into rather than producing right now," Sorensen said. "Pieridae's plan from the beginning was to be a fully integrated LNG facility owning the upstream as well as the terminal."

 

He said Pieridae would look for acquisitions later this year. Companies with western Canadian natural gas assets on the block include Husky Energy (HUSKF), while Cenovus Energy (CVE) also said it may sell some of its gas production.

 

Sorensen also expressed interest in assets from the Marcellus shale play, the most prolific natural gas field in the United States.

 

Pieridae expects to make a final investment decision on the Goldboro terminal later this year, and currently estimates the project will cost around $7.3 billion.

 

German utility Uniper has already committed to buying production from the first of two proposed LNG facilities at Goldboro, which will each produce 5 million metric tonnes a year, and owns a 1 percent stake in the terminal, Sorensen said.

 

There are more than a dozen proposed Canadian LNG terminals, but only the relatively small Woodfibre LNG project in Squamish, British Columbia, has received the final go-ahead, delaying Canada's entry into the global market.

 

Others, including a C$36 billion ($26.39 billion) project by Malaysia's state-owned oil company, Petronas, have stalled on concerns about weak energy prices and global oversupply of LNG.

 

On Monday, Pieridae agreed to buy Quebec-based oil and gas producer Petrolia Inc through a reverse takeover that will create a publicly traded company, Pieridae Energy Ltd, to be known as Amalco until the arrangement is completed in July.

 

"We are trying to solve how to get gas supply for the terminal and opportunities to finance," Sorensen said, adding that being a listed company would improve its chances of accessing capital to fund growth.

 

($1 = 1.3644 Canadian dollars)

(Reporting by Nia Williams; Editing by Peter Cooney)