Raising LNG Projects in a Non-Friendly Shale-Financing Environment – SocGen exits Pieridae Energy’s Funding


On Thursday, Canada’s Pieridae Energy Ltd. announced it hired Japanese lender MUFG Bank to help raise $20Bn for its proposed Goldboro liquefied natural gas (LNG) export plant in Nova Scotia. Accordingly, this decision came after Pieridae’s previous financial advisor, Societe Generale, announced its commitment to phasing out all-new shale financing.

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Particularly, Societe Generale will stop providing financial support to Goldboro and another Pieridae project, Quebec LNG, on environmental grounds. Moreover, the bank aims to limit exposure to shale oil and gas production in North America by 2023.

Societe Generale – Not backing LNG projects again

Indeed, this decision contrasts heavily with SocGen’s historical tradition of backing LNG projects. However, it is not the only bank that is phasing out its investments due to environmental reasons. For instance, the Royal Bank of Scotland and HSBC also have tightened restrictions on lending for high-carbon energy projects.

Furthermore, Pieridae separately said it would develop a carbon capture and sequestration facility in Alberta that would fully offset the Goldboro project’s carbon footprint.

Accordingly, the planned complex echoes similar efforts by LNG processors to meet increasing customer demand. Particularly, for environmental, social, and governance (ESG) measures.

Is this the end for LNG funding? Pieridae comments

Indeed, “without a concrete, measurable ESG plan, nothing is financeable these days,” Pieridae’s Chief Executive Officer Alfred Sorensen told Reuters.

Moreover, Pieridae said the backing by MUFG and the CCUS facility could help the 10 million tonnes per annum LNG project; achieve a final investment decision (FID) by June 30.

Regarding the difficulty raising funds for North American energy projects due to the uncertainty of local regulatory processes; Pieridae spokesman James Millar commented that state-owned national oil companies are filling the gap instead.

In fact, “North America (is) losing out on energy development opportunities,” Mr. Millar added.

Similarly, Poten & Partners forecasting manager Kristen Holmquist said during a recent webinar that it is very likely that; “there is going to be a lot of projects that are not going to be built.”

Finally, in its “Road map to net zero emissions by 2050 ” report earlier this month, the International Energy Agency said many of the liquefaction facilities currently under construction or at the planning stage would not be needed by mid-century.

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