Pieridae Energy Limited has received written notice from Kellogg Brown & Root Limited (KBR) that KBR is no longer prepared to negotiate and conclude a lump-sum turnkey engineering, procurement, construction and commissioning (EPCC) contract about 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.
A Reuters article published June 22, 2020, stated ‘KBR will exit most of its liquified natural gas (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 the principle of an untied loan guarantee of up to USD 4.5bn 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.
