![]() The light green portion of the graph (Exhibit 4) represents conventional natural gas production in Western Canada from 2000 to 2040, with a clear trend towards exhaustion.Įxhibit 4: Natural gas production by type and price forecasts Conventional production declines in Alberta and British Columbia It is highly unlikely they will be able to feed Train 1 entirely with conventional gas from Alberta, since the entire Western Canada conventional gas supply is slowly drying up as well. So far, Pieridae managed to acquire only 1,078 bcf of conventional natural gas reserves. ![]() Our section on Transportation identifies the pipeline routes available to the Goldboro facility. The numbers are consistent with Pieridae’s business model, which relies on outsourcing at least 50% of its gas, as outlined in a Laurentian bank document: « To supply both LNG Trains will require up to 1.5 bcf/d of raw gas, and Pieridae will likely seek to own up to 50% of that requirement, and source the remainder through the North American gas grid. To add to the problem, they would not even produce a third of the gas required for Train 1. If Pieridae extracts 243 MMcf/d continuously, which is impossible given the necessary decline in production, it would dry up its reserves in less than 14 years. 147 MMcf/d makes up less than a fifth of the required gas to feed Train 1. In other words, those assets are probably nearing or even past peak production. With constant extraction from this 1,078 bcf net reserve over 20 years, Pieridae would obtain 54 bcf of conventional gas per year, which equals 147 MMcf/d. After the transaction with Shell, Pieridae’s total reserves amounted to 1,078 bcf according to an audit published in the Annual Information Form published Ap(Exhibit 3): By the end of 2019, Pieridae’s upstream production reached 243 MMcf/d. In 2019, Shell’s upstream assets delivered 119 MMcf/d of conventional sour natural gas. Hence, it is very unlikely Pieridae will be able to even double the field’s current production levels. The Petroleum History Society published an article about it in 2002. The Jumping Pound facility isn’t merely old, it is the oldest gas plant in Alberta. The deal Pieridae concluded with Shell involves three sour gas processing plants, where sulfur will be removed from the gas : Jumping Pound, Caroline and Waterton. However, unless Pieridae discovers more conventional resources in the area, they will not be able to maintain this extraction rate for more than 18 years, as the fields hold resources and reserves of only 670.5 bcf. The Ikkuma wells yielded an average of 101 MMcf/d in Q3 2018, and the production rate may increase in the future. Pieridae acquired only the gas producing wells. Upon sale, Ikkuma separated its assets into oil and gas producing wells. (Shell’s assets are located roughly in the same area, west of Calgary.) ![]() Below is a map of Ikkuma’s assets (shown in yellow on the map, Exhibit 2), from its latest presentation to shareholders. In August 2018, Pieridae announced a merger with Ikkuma. We will also examine the case of the Sable offshore field in Nova Scotia as well as Utica and Marcellus shale in the U.S.ġ-the majority of the gas fed to Germany within Pieridae’s project would be fracked gas Ģ- Germany’s subsidy to Pieridae might increase hydraulic fracturing extraction in areas that weren’t affected much by the process so far.Įxhibit 1 Conventional natural gas opportunities in Western Canada Ikkuma’s assets in the Alberta foothills Meanwhile, Train 2 would rely on gas from New Brunswick and the eastern part of Quebec. During its latest corporate presentation, the company explained it will feed Train 1 with gas from its assets in Alberta, following deals with Ikkuma and Shell. The following map (Exhibit 1), which Pieridae presented on numerous occasions as its plan to source and transport gas, offers many answers. Do the company’s assets allow it to only provide conventional gas to its German customer, or will it eventually rely on fracked gas during its twenty years contract with Uniper? To answer this question, we need to look at Pieridae’s potential prospects for sourcing natural gas. ![]() To some extent, Germany forbids fracking on its territory and doesn’t want to be caught subcontracting this unclean process to outside jurisdictions. This agreement includes a US $4.5 billion loan guarantee from the German government through the KfW investment bank: US $3 billion for the construction of the terminal, and US $1.5 billion for the development of upstream assets.Īll is under one condition: the gas developed with German funding must not be fracked. Major German utility company Uniper signed a take-or-pay agreement for all the gas from the terminal’s first train. The terminal could be considered well on its way, as a construction permit has been granted. Pieridae has been working on an LNG terminal at Goldboro, Nova Scotia, for some years now.
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