Developers of the Cedar LNG have marked a critical milestone with the signing of long-term natural gas offtake agreements and a notice to proceed with engineering, procurement, and construction (EPC) contracts.
Cedar LNG today also revealed the cost of the project -- US$3.4 billion ($4.6 billion) – and anticipated commercial operations date: 2028.
The Cedar LNG project in Kitimat is being developed by the Haisla First Nation and Pembina Pipleine Corp. (TSX:PPL,NYSE:PBA).
Cedar LNG announced it was issuing a notice to proceed on EPC contracts with Samsung Heavy Industries and Black and Veatch, following the signing of long-term gas supply agreements.
ARC Resources Ltd. (TSX: ARX) will supply Cedar LNG with 200 million cubic feet per day of natural gas (1.5 million tonnes per annum) for a 20-year period. The agreement is contingent on a final investment decision (FID) being made. Pembina has also signed a bridging agreement to supply another 1.5 million tonnes per annum.
“Pembina intends to assign its capacity to a third-party following a positive FID, with commercial offtake discussions continuing with multiple other customers,” Pembina said in a news release.
“Today’s achievements mark an exciting time for our Nation as we seek to make Cedar LNG – the world’s lowest carbon and first Indigenous majority-owned LNG Facility – a reality in the coming months,” said Haisla Chief Councillor Crystal Smith. “I am incredibly grateful to our nation, all levels of government, Pembina and all our partners who have supported our journey to advance a project that protects our environmental and cultural values, while delivering prosperity for decades to come.”
“We are on-track to deliver an Indigenous majority owned, best-in-class LNG facility – one that will benefit the Haisla Nation, Pembina and its customers, the region, and all of ÎÚÑ»´«Ã½, while meaningfully contributing to the transition to a lower-carbon economy,” said Pembina president Scott Burrows.
Pembina said in a news release that it expects Cedar LNG will generate the company annual earnings of US$200 million to US$260 million EBITDA (earnings before interest taxes depreciation and amortization).
The Cedar LNG project is being designed as a floating LNG terminal. It will be designed and built in South Korea by Samsung Heavy Industries and Black and Veatch. Once built, it will be floated from South Korea to Kitimat.
"With major development milestones achieved, Cedar LNG is preparing for construction, with pre-FID early works commencing in May 2024, including tree clearing and rough grading activities at our proposed marine terminal near Kitimat," Cedar LNG said in its news release.
Cedar LNG is aiming for a final investment decision to be made mid-year this year, with an estimated in-service date in late 2028.
