ARC advances LNG strategy with Cedar LNG memorandum of understanding
March 14, 2023 – Today, ARC announced it has signed a Memorandum of Understanding (MOU) to supply and liquefy natural gas with Cedar LNG (the Project) – a proposed floating LNG export facility with Haisla Nation and Pembina Pipeline Corporation. The MOU outlines an anticipated 20-year agreement to supply and liquefy approximately 200 million standard cubic feet per day (MMcf/day) of natural gas with the Project, resulting in the equivalent of 1.5 million tonnes per annum of LNG or approximately one half of the facility’s total production.
“We are pleased to partner with Cedar LNG and its partners Haisla Nation and Pembina Pipeline on this important infrastructure project for Canada. Through responsible development, innovation, and collaboration, we can advance the export of more Canadian energy to global markets – this is another step forward,” said Terry Anderson, President and Chief Executive Officer, ARC Resources. “Through this agreement, we are advancing ARC’s LNG strategy to deliver our low-cost natural gas to key demand markets around the world.”
“We are pleased to have ARC Resources as Cedar LNG’s first customer. ARC’s asset quality, leading ESG performance and financial strength, are important attributes in an LNG partner, and will help drive our project forward,” said Doug Arnell, Cedar LNG Chief Executive Officer.
Enabling an Energy Future & Maximizing Long-term Profitability
Under this agreement, ARC will own the molecule through each step of the LNG value chain – production, liquefaction, and, ultimately, to marketing and sales to offtakers overseas. This supports ARC’s LNG strategy to increase its exposure to LNG-linked pricing, and to supply natural gas to international markets where demand is expected to remain strong.
ARC and Cedar LNG will now work to finalize a definitive agreement, which will represent the third long-term LNG agreement announced by ARC over the past three years.
- In 2021, ARC signed a long-term agreement to supply 150 MMcf/day to an LNG Canada participant, slated to commence with the startup of LNG Canada in 2025.
- In 2022, ARC entered into its second agreement to supply 140,0000 MMBtu/day with Cheniere Energy, Inc., a global LNG provider located on the U.S. Gulf Coast. This agreement is anticipated to begin in 2027 and will provide exposure to Platts JKM pricing.
- Through Cedar LNG, ARC will pursue commercial marketing arrangements targeting Platts JKM pricing, increasing the Company’s anticipated total exposure to internationally linked pricing.
Next Steps for Cedar LNG
Located in Kitimat, British Columbia within the traditional territory of the Haisla Nation, the Cedar LNG Project will be the first Indigenous-majority-owned LNG export facility in Canada. Today, the Project achieved a major milestone with the receipt of an environmental assessment certificate from the Government of British Columbia.
In the coming months, Cedar LNG will be focused on advancing work across four streams – engineering, regulatory, financing, and commercial, inclusive of identifying long-term volume commitments with potential customers. Pending approvals and other authorizations a final investment decision is anticipated in 2023.
To learn more about Cedar LNG, watch the video:
