LNG prices skyrocket, but fresh delays mean Canadian projects will mostly miss the boom
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Tonken said that between U.S. domestic natural gas demand, U.S. LNG exports and U.S. natural gas exports to Mexico, natural gas demand south of the Canadian border adds up to about 97 billion cubic feet of demand per day.
“Supply is currently between 88 bcfd and 90 bcfd. So we’re short gas,” he said.
Even if North American natural gas prices are looking up, producers are still missing out on global prices that are as much as 15 times higher than the full strip for NYMEX gas this year.
Alfred Sorensen, president and CEO of Calgary-based Pieridae Energy Ltd., has been trying to secure financing for an LNG terminal called Goldboro in Nova Scotia and described 2020 as “a perfect storm,” that has frustrated his company’s capital-raising efforts.
“We had a scenario where gas built up coming into winter, there was no winter in Europe, then COVID-19 came and gas got destroyed,” Sorensen said, adding that he hasn’t been able to travel to meet potential investors in the project through 2020 but is still hopeful he’ll be able to engage investors this year.
“To do the kind of deals we’re going to do, we’re going to have to see how we can go to places. I don’t think that’s going to occur for the next three or four months,” Sorensen said, adding he’s looking to raise $1 billion in the first half of this year.
Sorensen said the company’s new engineering and construction contractor, Virginia-based Bechtel Corp., is due to send the company a preliminary all-in cost estimate for the project by the end of March. The company hopes to make a decision on pre-construction work by the end of June.
“If we get to the finish line, there’ll be a very big bottle of champagne,” Sorensen said.
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