The aim of Berlin’s new financial initiative is to ensure that the plant, once operational, would supply the agreed amount of liquefied natural gas to the European market over a term of twenty years.
The German federal government has announced its willingness to provide $1.5 billion loan guarantee to Goldboro LNG, a liquefied natural gas plant project in Canada run by Pieridae Energy.
Earlier, Berlin also offered $3 billion loan guarantees for the project, with the total sum of loan guarantees therefore reaching $4.5 billion.
“This confirmation not only satisfies a critical condition leading to the completion of Pieridae’s acquisition of Ikkuma as contemplated by the arrangement agreement entered into between the Company and Ikkuma on August 23, 2018, but also marks an important milestone in advancing the integrated Goldboro LNG project towards a final investment decision,” Pieridae Energy said in a statement.
The LNG plant, which is expected to have an estimated annual output of about 10 million tons, is set to be built in Nova Scotia near the Maritimes & Northeast Pipeline which runs from Canada to the United States.
The German investment is aimed at ensuring that “a specified amount of liquefied natural gas (LNG) produced annually from the proposed Goldboro LNG facility over a term of twenty years will be delivered to, and be regasified in, Europe,” the company added.
At the beginning of its term, Merkel’s Cabinet has tasked itself with reducing Germany’s dependence on natural gas imports via pipelines from Russia and Norway. The new government plans “to create infrastructure for liquefied natural gas (LNG)” from scratch as a part of its energy and climate program.
According to Germany’s Economy and Energy Ministry, Merkel endorses all initiatives which support the further diversification of the gas supply — whether from different regions or the means of transporting gas, while the government strongly backs private initiatives to build LNG terminals, which Germany now lacks.