Burrows revealed this during Pembina’s first-quarter earnings call on May 9.
In June 2024, Pembina and the Haisla Nation took the final investment decision on the $4 billion LNG project, which is expected to be in service in late 2028.
The Haisla Nation has a 50.1 percent stake and Pembina owns 49.9 percent in the project which includes the construction of a floating LNG facility with a nameplate capacity of 3.3 million tonnes per annum (mtpa), located in the traditional territory of the Haisla Nation, on Canada’s West Coast.
Cedar LNG has secured 20-year take-or-pay liquefaction tolling services agreements with ARC Resources and Pembina for 1.5 mtpa of LNG each.
It also signed a 20-year take-or-pay fixed toll contract with compatriot ARC Resources.
As part of the agreement, ARC will supply Cedar LNG with about 200 million cubic feet per day of Canadian natural gas for liquefaction at the Cedar LNG facility.
Pembina has executed an identical bridging agreement with Cedar LNG for 1.5 mtpa of capacity and is working to assign its contracted capacity to a third-party.
Remarketing talks
Burrows said during the earnings call that the process of remarketing Pembina’s capacity on the Cedar LNG project to third parties continues to “progress well.”
“We have now shortlisted the preferred counterparties and entered definitive agreement negotiations.
He also answered a question about whether Pembina’s patience is paying off in terms of the geopolitical trends supporting higher demand and perhaps stronger economics for the remarketing capacity.
“I think it’s more than just the geopolitical changes. I think it’s also the fact that we continue to see growing gas out of Northeast BC that needs an egress solution. We’re continuing to see strong ARBs between Canadian gas and Asian gas prices. And so that’s driving pretty significant interest in the Cedar capacity,” Burrows said.
“So we’re pleased with where that’s going. Also, the fact that, obviously, we’re FIDed and we’re a year into construction and a year closer to the service date. So I think all of those factors are leading decent interest in this project, and we’re pretty pleased with where we’re going. So I would say the patience has paid off. I mean, at this stage, we are working very hard to turn the definitive into a final executable agreement,” Burrows said.
“But they’re big complicated agreements. And as we’ve said for the last several months that we’ll do the right deal for Pembina, not the fastest deal for Pembina, and we continue to progress that,” he said.
Expansion
Discussing the potential of Cedar 2, Burrows said, “certainly the gas demand is there.”
“We saw that from our recontracting efforts. Based on early stages negotiations on Cedar capacity, we believe there is demand for Cedar 2,” he said.
“But until we have a line of sight to that gas on Coastal GasLink or other solutions, that’s kind of the gating item, and that’s something that we continue to work on,” he said.
