The Alberta Energy Regulator (AER) has rejected Shell’s application to transfer its Foothills assets after they were sold to Canadian liquefied natural gas (LNG) developer Pieridae Energy.
AER cited environmental concerns as the reason behind blocking the transfer of Shell Canada assets to LNG developer, BNN Bloomberg reported.
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The news agency quoted Shell Canada president Michael Crothers as saying: “We’re trying to find the right mechanism. We’ll be seeking to understand from the (Alberta Energy Regulator) what would be acceptable to them.”
In October last year, Pieridae Energy acquired Shell Canada’s midstream and upstream assets in the Alberta Foothills area for C$190m (approximately $144m).
The deal comprised three of Shell’s Alberta assets in Jumping Pound, Caroline and Waterton. These assets produce about 29,000 barrels of oil equivalent per day (boepd).
Last June, Pieridae initially signed the agreement related to this acquisition with Shell.
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By GlobalDataIn a press release, Pieridae said it was disappointed by AER’s decision and noted that both companies are seeking clarity from the regulator.
The LNG developer also mentioned that it is evaluating options on resubmitting the transfer applications.
Pieridae Energy CEO Alfred Sorensen said: “We are disappointed by the AER’s decision regarding the transfer of licences for the Foothills Assets. The decision has nothing to do with Pieridae’s financial position nor its ability to clean up certain assets.
“The issue for denial was the fact that there is no precedent for splitting a licence or no ability under the current legislation to do so. This issue only applies to the Waterton and Jumping Pound gas plants.
“The Foothills assets are high-quality operating gas wells and gas processing plants with long-term potential and remain attractive as the anchor production for our Goldboro LNG Project.”
If the assets are transferred to Pieridae Energy, the LNG developer will be able to supply additional gas required for the first phase of its proposed Goldboro LNG terminal in Nova Scotia, eastern Canada.
