Pieridae Energy Ltd. has received written notice on July 13 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 the proposed Goldboro LNG Facility. Although KBR has indicated they remain interested in providing the EPCC services for the construction of the Goldboro LNG Facility, KBR’s decision to no longer provide a fixed price contract is in apparent contravention of its obligation under the terms of a signed services agreement dated March 27, 2019 made between Pieridae and KBR.

“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,” Alfred Sorensen, Pieridae CEO, said. “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.”

A Reuters article published June 22, 2020 stated that KBR will exit most of its LNG construction and other energy projects. The article’s author wrote that KBR’s CEO sent an email to employees, stating that the company will “no longer engage in lump sum, blue-collar construction services,” saying the COVID-19 pandemic accelerated the decision to leave fixed-price energy projects.

The Goldboro LNG project remains solid with many key 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 gas, confirmation of eligibility in principle of an untied loan guarantee of up to $4.5 billion from the German Government, a signed benefits agreement with the Nova Scotia Mi’kmaq, and Pieridae has the majority of the gas needed, when developed, to supply Goldboro’s Train 1.

Uniper had agreed in recent weeks to extend key deadlines including making a final investment decision on the Goldboro LNG Facility by June 30, 2021. Concurrently, Pieridae continues to take further tangible steps to advance the project as we design and plan core owner infrastructure projects such as the highway re-alignment around the LNG Facility site; construction of a large-scale work camp; building key marine facilities for LNG offloading; and, facility site terracing.