Swiss utility and energy trader Axpo has announced it is in talks for a ten-year supply deal with Canadian energy firm Pieridae Energy, which is planning to build a liquefied natural gas (LNG) terminal.
The parties will complete the deal after Pieridae’s receives of gas supplies from the east of Canada and the northeast of the US. These supplies are anticipated to be delivered within the next five months.
The sales and purchase agreement would help to move the C$10bn ($7.6bn) Goldboro project along, which would be the first LNG export terminal on Canada’s East Coast.
Axpo said in a statement: “Under the term sheet with Pieridae Energy, Axpo will purchase LNG from Train 2 of the Goldboro liquefaction facility and sell it across Europe.”
Deliveries are expected to begin in the third quarter of 2023.
Pieridae has already signed a supply deal with German utility Uniper, agreeing to sell five million tonnes of gas annually over the next 20 years.
If construction of the Goldboro project begins by the end of this year, it is estimated that it will generate 10 million tonnes of gas annually, starting in 2023. The project has stagnated due to difficulty in sourcing financing for it.
Pieridae Chief Executive Alfred Sorensen told Reuters: “Are we delusional about how we can get to the finish line? It really has been from the very beginning about how we can work with the Germans and work to improve their energy security.”
He added that the firm is ‘very close’ to locking down enough sales to make a final investment decision.
Pieridae is finalising a loan guarantee of at least $3bn from the German government after the country announced its decision to diversify its gas suppliers, with the majority of imports currently coming from Russia.
The energy firm is also in talks with an undisclosed Alberta gas producer, which will potentially supply Goldboro.
Canada is a key player in the global oil and gas industry and is looking to stake its claim in the LNG market. Several projects have been proposed across Canada, though some of the ones on the east coast have lost momentum due to a dip in global LNG prices.
One of the largest projects proposed is LNG Canada, a C$40bn export terminal which would be located in Kitimat, British Columbia. News on whether the project will be pursued is expected by the end of this year.