Pieridae Energy hires MUFG as SocGen exits over emissions worries

The decision to hire a new banker came after Societe Generale SA, its previous financial advisor, committed to phasing out of new shale financing on environmental grounds.

Societe Generale confirmed it had stopped providing support to both Goldboro and a separate project, Quebec LNG, to limit exposure to shale oil and gas production in North America by 2023.

Historically a backer of LNG projects, SocGen’s departure further reduces investment options for a dozen North American LNG projects still requiring financing. Royal Bank of Scotland and HSBC also have tightened restrictions on lending for high-carbon energy projects.

Pieridae separately said it will develop a carbon capture and sequestration facility in Alberta that would fully offset the Goldboro project’s carbon footprint.

The planned complex echoes similar efforts by LNG processors to meet increasing customer demand for environmental, social and governance (ESG) measures.

“Without a concrete, measurable ESG plan nothing is financeable these days,” Pieridae’s Chief Executive Officer Alfred Sorensen told Reuters.

Pieridae said the backing by MUFG and the carbon capture facility could help the 10 million tonnes per annum LNG project achieve a final investment decision (FID) by June 30.

It has become more difficult to raise funds for North American energy projects due to the uncertainty of local regulatory processes, Pieridae spokesman James Millar said, with state-owned national oil companies filling the gap instead.

“North America (is) losing out on energy development opportunities,” Millar said.

“There is going to be a lot of projects that are likely not going to be built,” Poten & Partners forecasting manager Kristen Holmquist said during a recent webinar.

In its “Road map to net zero emissions by 2050 here” report earlier this month, the International Energy Agency said many of the liquefaction facilities currently under construction or at the planning stage would not be needed.