Pembina Purchases a Half Stake in Cedar LNG

The Canadian pipeline operator will also operate the proposed floating LNG project with a planned startup slated for 2027.

Layout of the planned Cedar LNG project.

Pembina Pipeline will acquire a 50% stake in the proposed $2.4-billion Cedar LNG Project to develop the floating LNG facility in British Columbia in partnership with indigenous group, the Haisla Nation. The pipeline operator expects to invest about $90 million into Cedar LNG over the next 24 months, including costs to acquire its interest in the project as well as development costs prior to the final investment decision expected sometime in 2023.

The company, which will acquire the equity interests in Cedar LNG from PTE Cedar LP and Delfin Midstream Inc., will operate the project going forward. Haisla will own the remaining 50% stake.

Pembina has been busy of late. Just last week, the company said it would buy Inter Pipeline in an all-stock deal valued at around C$8.3 billion (US$6.9 billion) creating one of the largest energy infrastructure companies in Canada, with a pro forma enterprise value of $53 billion.

Cedar LNG is a proposed floating LNG facility in Kitimat, British Columbia, Canada, within the traditional territory of the Haisla Nation. The project is located on Haisla Nation-owned land in the Douglas Channel, one of the principal shipping routes on the British Columbia coast.

The project will have a liquefaction capacity of 3 mtpa of LNG and will source natural gas from the prolific Montney resource play in northeast British Columbia. Cedar LNG has secured a long-term transportation agreement on the Coastal GasLink pipeline for 400 MMcf/D of firm capacity. Natural gas will be delivered to the project site through an 8 km-long pipeline that connects to the Coastal GasLink pipeline.

The project will largely target the Asia-Pacific market. Cedar LNG will leverage Pembina’s existing LNG offtaker relationships to secure long-term, tolling-based offtake arrangements with LNG buyers.

The project has secured its LNG export license from the Canada Energy Regulator and is undergoing environmental assessments by the provincial and federal governments. Subject to additional factors, including regulatory and environmental approvals, the expected in-service date for the project is 2027.