Pembina, Petronas sign 20-year Cedar LNG capacity deal

Pembina Pipeline Corp. and Petroliam Nasional Berhad (Petronas) have signed a long-term agreement for 1.0 million tonnes/year (tpy) of Pembina's liquefaction capacity at the 3.3-million tpy floating Cedar LNG plant in Kitimat, British Columbia, Canada.

Through the agreement, Pembina will provide transportation and liquefaction capacity to Petronas LNG Ltd. over a 20-year term, the companies said in a joint release Nov. 5.

The deal “enables Petronas to access an additional natural gas export outlet for its sizeable Canadian upstream investment, while providing Pembina with a stable long-term, take-or-pay revenue stream and the potential for value enhancement,” the companies said.

Pembina previously signed a 20-year take-or-pay liquefaction tolling service agreement for 1.5 million tpy of LNG to support the final investment decision on Cedar LNG in June 2024 and ultimately maintain key project timing and economic parameters, with the expectation of remarketing the capacity at a later stage, the companies said. The deal with Petronas “marks a significant first step in Pembina's remarketing efforts,” the companies continued.

Pembina expects to reach definitive agreements for the remaining 0.5 million tpy of capacity by year-end.

The Cedar LNG project, a partnership between the Haisla Nation and Pembina to develop a floating LNG plant in Kitimat within the traditional territory of the Haisla Nation, has an expected in-service date of late 2028.