This is part two of a two-part interview with Alfred Sorensen, President and Chief Executive Officer of Pieridae Energy.Read part one "Pieridae's role in Canada's LNG industry & its engagement with local communities".
Gastech News: In terms of the overall export opportunities, we’re currently in a landscape of supply glut, with Asia taking on capacity at lower prices and Europe tending to be quite a flat mature market. How can Eastern Canada best access European markets and maybe those further afield to be competitive with LNG from other regions?
Alfred Sorensen: I think the key thing about Nova Scotia is that it’s the closest landfall from North America to the European coast, and it’s a shipping advantage from both a capital and an operating perspective in that we can move more volumes with fewer ships at a lower cost. I think that advantage is one we will have forever and it plays an important role in why we have decided to build the Goldboro Terminal in the first place. I think the current market conditions are certainly not conducive to a project being built. But our view is by the time we come on-stream in 2021, even if market demand is flat in Europe at the current time, the indigenous supply, particularly from Western Europe, is continuing to decline and our contract with Uniper is specifically for filing that indigenous decline.
I think there’s an interest in Europe to maintain its current purchase from Russia but not to increase that. There might be a desire from the Russian side to increase further access into the Western European market but I think that’s an advantage the project has. Also, there is a firm government desire to diversify risk supply away from Russia and that’s not going to go away. That’s what allows us to move forward and more importantly from a project perspective that having the long-term offtake in place today is what is going to allow the project to be built on a timely basis.
Gastech News: Germany is obviously one of Russia’s largest customers. With regards to other key regions within Europe, has there been interest in offtake capacity, apart from Germany, to perhaps be involved in your project?
Alfred Sorensen: There’s obviously a capacity glut between all sources of energy right now and as a result, I think that’s slowing the decision-making. Certainly, we don’t want to be seen or to execute contracts that are so out of money that the odds of them getting to money by the time 2021 comes around is fairly low. We have enough capacity taken up in our first train, that allows a project to happen and as we get close to making our final investment decision, we’re hopefully able to build two trains. We definitely have a project; we just don’t know exactly what size it’s going to be.
Join the Conversation: How can Canada maximise its access to European markets? Leave a comment below.
Alfred Sorensen, President and Chief Executive Officer of Pieridae Energy attended the 2016 Canada LNG Conference & Exhibition in Vancouver. Find out more about next year’s event which will take place from 16-18 May 2017. The Canada LNG Conference & Exhibition is where the global LNG community meets to discuss and develop the future of Canada’s LNG industry.
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