Calgary-based natural gas producer Pieridae Energy Ltd. is considering revamping its proposed Goldboro LNG project in Nova Scotia into a smaller, offshore facility because of the current high-cost operating environment.

“One of the big issues we faced is the cost of production of our natural gas, and in the low-cost environment that we were in during the last two years prior to the COVID situation arising, it was very difficult to be an organization with a very large [liquefied natural gas] project on our back,” said Alfred Sorensen, chief executive officer of Pieridae, in an interview Friday.

He said the expected capital expenditure needed for the new offshore facility will be roughly $2 billion – much less than the $10 billion needed for the original project.

The new cost structure, along with soaring natural gas prices in Europe, according to Sorensen, will provide “long-term economic viability” for the company. 

“I think we’re moving into a different phase of energy worldwide pricing and that’s one of the reasons why we continue to work on the project,” he said.

“There’s no doubt the economics have significantly improved. So that’s why we didn’t give up completely.”

The floating facility is expected to process 2.5 million metric tonnes of natural gas per year; the goal for the original onshore plant was to process 10 million metric tonnes annually.

Last July, the company shelved its plans to build an onshore liquefied natural gas plant in Goldboro, N.S. that would process gas from Alberta for export to Europe.

In a statement dated July 2, the company said it had “not been able to meet all of the key conditions necessary to make a final investment decision,” and that it would “move Goldboro LNG in a new direction.” The company was reportedly seeking a $925-million investment from the federal government to help cover the costs and account for pipeline-related risks at the time.

“Canada had to do a significant amount of work [on the pipeline system] and the cost of that work given the current environment for pipelines in Canada - the cost structure was very uncertain and TC Energy wasn’t willing to take that risk,” Sorensen said.

“As a small organization like Pieridae, we couldn’t look at building both the LNG project and solve the pipeline issues as well.”

Earlier this week, Pieridae announced it had completed a strategic review of the company that examined a possible sale or merger, among other options to unlock shareholder value. The special committee tasked with the review found Pieridae was best left as a stand-alone company.