Pieridae Energy Ltd. received written notice from Kellogg Brown & Root Ltd. (KBR) that KBR is no longer prepared to negotiate and conclude a lump-sum turnkey engineering, procurement, construction, and commissioning (EPCC) contract in relation to Pieridae’s proposed two-train, 10-million tonne/year (tpy) Goldboro LNG plant. Although KBR has indicated it remains interested in providing EPCC services for construction of Goldboro LNG, Pieridae says KBR’s decision to no longer provide a fixed price contract is in contravention of its obligation under the terms of a signed services agreement dated Mar. 27, 2019.
“With this notice from KBR, we are looking at all of our options, including discussing the matter with legal counsel to determine the most appropriate next steps,” said Pieridae chief executive officer Alfred Sorensen. “There are other reputable and experienced firms who have the expertise to provide these services, with some already indicating a willingness to replace KBR. We have had discussions with several of them to gauge their interest.”
KBR announced in June 2020 that it would “exit from lump-sum EPC” work in a move hastened by the COVID-19 pandemic.
Pieridae said Goldboro LNG remains on solid footing, with many important elements in place: the majority of key permits, a 20-year contract with German energy company Uniper Global Commodities to buy half of Goldboro’s output, confirmation of eligibility in principle of an untied loan guarantee of as much as $4.5 billion from the German Government, a signed benefits agreement with the Nova Scotia Mi’kmaq, and most of the gas needed, when developed, to supply Train 1.
Uniper had agreed in recent weeks to extend key deadlines including not making a final investment decision (FID) on the Goldboro LNG until June 30, 2021. Concurrently, Pieridae continues highway realignment around the site, construction of a large-scale work camp, building marine infrastructure capable of loading carriers as large as 250,000 cu m, and site terracing.
Pieridae announced earlier this year that an expected 2020 FID would no longer occur (OGJ Online, Apr. 16, 2020).
