Pembina and Ovintiv announced the deal in separate statements on Monday.
The supplies will start with the launch of commercial operations at Cedar LNG, anticipated in late 2028.
Ovintiv, one of Canada’s largest natural gas producers, said that this deal will enable the company with access to additional export markets, complementary to the company’s existing portfolio of natural gas transportation arrangements.
Export from the west coast of Canada offers the shortest shipping distance to Asian LNG markets from North America, Ovintiv noted.
Similar in structure to the previously announced Petronas agreement for 1 mtpa, the agreement with Ovintiv is a synthetic liquefaction service structure under which Pembina will provide transportation and liquefaction capacity to Ovintiv and receive a stable long-term, take-or-pay revenue stream with the potential for incremental value enhancement, Pembina said.
Following the agreement with Ovintiv, Pembina has now remarketed the full 1.5 mtpa of its Cedar LNG capacity to third parties.
The Canadian company previously signed a 20-year take-or-pay liquefaction tolling service agreement for 1.5 mtpa 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.
$4 billion
The $4 billion Cedar LNG project remains on time and on budget, with an expected in-service date in late 2028, Pembina said.
The Haisla Nation has a 50.1 percent stake while Pembina owns 49.9 percent in the project which includes the construction of a floating LNG facility with a nameplate capacity of 3.3 mtpa, located in the traditional territory of the Haisla Nation.
In June, South Korea’s Samsung Heavy Industries officially started building Cedar’s FLNG, which will be installed in Kitimat.
Cedar LNG said that the Haisla Nation has chosen “megúgu” as the name for the floating LNG facility.
Once complete, the vessel will be transported from South Korea to the Cedar LNG site in Haisla traditional territory.
