BURSTPembina Pipeline Corporation has secured a long-term customer for its Cedar LNG project, signing a 20-year agreement with Petronas for 1.0 million tonnes per annum (mtpa) of liquefaction capacity at the planned export facility near Kitimat.
The deal, anounced Nov. 5, marks a major step in Pembina’s efforts to commercialize Cedar LNG, which it is developing in partnership with the Haisla Nation. Under the agreement, Pembina will provide transportation and liquefaction services to Petronas through a synthetic tolling structure, which Pembina says supports Petronas’ existing natural gas production operations in Canada.
“This agreement further validates Cedar LNG and highlights the strong demand for global export capacity given the clear advantages of Canadian West Coast LNG, including competitively priced feedstock and advantaged shipping distances to Asian markets,” said Stu Taylor, Pembina’s Senior Vice President & Corporate Development Officer.
Petronas, through its Canadian subsidiary, is already one of the largest natural gas producers in the country. The agreement secures a long-term outlet for its gas, while providing Pembina with a stable, take-or-pay revenue stream.
“This milestone reflects Petronas’ long-standing commitment to our investment in Canada and our continued effort to fortify our global LNG supply portfolio,” said Shamsairi M Ibrahim, Vice President of LNG Marketing and Trading, Petronas Gas and Maritime Business. “We welcome this partnership with Pembina and the Cedar LNG project, as it underscores Petronas’ role as an integrated energy player and demonstrates our dedication to responsibly monetize our gas resources.”
The agreement is also a key part of Pembina’s strategy to re-market 1.5 mtpa of capacity it committed to in June 2024 to help secure a final investment decision on Cedar LNG. With the Petronas deal now signed, Pembina expects to finalize arrangements for the remaining 0.5 mtpa by the end of 2025.
Cedar LNG is a US$4 billion floating liquefied natural gas project with Indigenous ownership through the Haisla Nation. It remains on schedule and on budget, with construction targeted for completion and in-service by late 2028.