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Pieridae finalizes purchase of Shell Foothills assets

Thursday, 05 December 2019. Posted in Shootin' the Breeze

Pieridae finalizes purchase of Shell Foothills assets

Pieridae finalizes purchase of Shell Foothills assets

By Jess Harrington

The Waterton gas complex is under new ownership, and representatives for Pieridae Energy say the handoff from Shell has been smooth.

Pieridae officially closed its acquisition of all of Shell Canada’s former Alberta Foothills assets on Oct. 17.

The sale included the purchase of three distinct sour gas plants at Waterton, Jumping Pound and Caroline, as well as the gas fields that feed them.

Shell put the assets up for sale in January, citing a desire to prioritize investment in its integrated and shale gas assets. In June, the company announced the sale of the three plants to Pieridae for C$190 million.

Alfred Sorensen, chief executive officer for Pieridae, calls the finalization of this sale a “transformational change” for the company.

With the securing of these assets, Pieridae now has all the resources needed to move ahead with its US$10 billion Goldboro Liquid Natural Gas project.

LNG Goldboro is a natural gas export operation which has been in the works since 2011.

The plan is to transport resources from Pieridae’s holdings in the Alberta foothills to a processing and storage facility in Goldboro, N.S., using existing pipelines. It will then be exported by ship to markets in South America, Asia and Europe, primarily Germany.

Pieridae has signed a minimum 20-year supply contract with German utility giant Uniper, and has been approved in principle for US$4.5 billion in loan guarantees from the German government to see the project through. The contract with Uniper is the largest single sales agreement in Canadian history, valued at $78 billion.

Pieridae has all the major regulatory, environmental and construction permits in place to start building the export facility in Goldboro, and is now working with KBR, Inc. to develop plans for the depot.

KBR is an American engineering, construction and private military contracting company with experience in large-scale energy projects. Among these are Peru LNG and the Gorgon gas project in Australia.

Locally, the change in ownership has not meant any significant changes at the Waterton site.

As promised when the sale was first confirmed, Pieridae has retained all pre-existing on-site Shell employees; in other words, there have been no layoffs at the plant.

James Millar, director of external affairs for Pieridae, says this is precisely what has allowed his company to be successful in taking over its new assets so far.

“When we announced the acquisition, we said we need to ensure these assets run smoothly and we need that core group of individuals who know what they’re doing to do that,” he says.

“I think the transition has gone very well, and that’s a testament to the workers we have at all three facilities, especially Waterton,” he says.

Kali Larson, longtime community liaison for the Waterton plant, confirms that things are going well at the complex.

“The easiest way I can describe it is, currently, we’re operating business as usual,” she says. 

“Everything is running the same. We’re very happy about it.”

Both James and Kali also reconfirm that Pieridae plans to continue investing in local organizations as Shell historically has.

“We need to have good relationships with the community because without those, you won’t operate as you should,” says James. “Those relationships are very important and we take them seriously — community investment will remain a priority.”

To help ease its transition out and give Pieridae a precedent for developing its community outreach, Shell announced the establishment of a $2 million legacy fund in June.

The fund will give non-profit organizations access to continued funding through 2020 and 2021.

“Since beginning our Foothills business nearly 70 years ago, we’ve strived to leave a positive, lasting legacy in the [communities] where we operate,” the web page for the Shell Foothills Legacy Fund reads.

“The fund has been created … to thank you for the support and trust you placed in our operations, and to help valued community partners … continue delivering important services.”

Kali says she’s thrilled to know that this fund is in place, and even more excited to know that her new company intends to build on Shell’s legacy.

“Personally, having worked for Shell for over 10 years, and growing up in the area and seeing what they’ve done, it’s great to see this asset went to a buyer with similar values as Shell. It’s a good thing for our community.”

If you’d like to learn more about this acquisition, the Shell Foothills Legacy Fund and the LNG Goldboro project, you can visit shell.ca and pieridaeenergy.com. The press release about the sale can be found here.