Achi news desk-
The proposed US$3.4-billion Cedar LNG facility is looking more likely to become a reality following recent positive statements from the project’s partners.
RBC Capital Markets said Friday that it expects Pembina Pipeline Corp and its partner, BC’s Haisla Nation, to greenlight the project with a final investment decision soon.
“We expect that a positive final investment decision for the Cedar LNG project will occur assuming no downturn in the project finance market,” RBC analyst Robert Kwan wrote in a note to clients.
“Pembina has made progress on a number of key items.”
Cedar LNG is a floating liquefied natural gas facility that pipeline company Pembina plans to build with the Haisla in Kitimat, BC
The facility, which would produce LNG for export to Asian markets, would be owned by the Haisla, making it the largest Indigenous-owned infrastructure project in the country.
Pembina announced Thursday that it has signed a long-term natural gas supply agreement for the facility with ARC Resources Ltd., a Calgary-headquartered company with natural gas drilling operations in the Montney region of northeastern BC and northwestern Alberta .
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Under the terms of the agreement, ARC will provide approximately 200 million cubic feet per day of natural gas for liquefaction to the facility, for a 20-year term beginning with the start of commercial operations, which is anticipated in the second half of 2028.
Pembina also said on Thursday that it had issued a formal “notice to proceed” to its contractors for the engineering, procurement and construction of the LNG production unit.
Cedar LNG has already received all major regulatory approvals and is developing an agreement that would connect the floating facility to Coastal GasLink, the TC Energy-owned pipeline that will also carry natural gas to the Canadian LNG facility and led by Shell.
Construction of LNG Canada near Kitimat is nearing completion and is expected to be the country’s first liquefied natural gas export terminal.
Another smaller LNG facility, Woodfibre LNG, has also received regulatory approval for construction near Squamish, BC
Pembina said Thursday it expects to make its final investment decision on Cedar LNG by the middle of this year.
The company had previously said a decision could be made before the end of the first quarter, with construction on the land starting as soon as the second quarter of this year. But he later delayed his decision, saying that ongoing negotiations on natural gas supply, as well as securing some third-party contracts and project financing, must be resolved first.
Proponents of Canada’s LNG industry say liquefied natural gas from Canada could help reduce global greenhouse gas emissions by replacing coal in countries that still rely on the dirty fuel.
But environmentalists argue that LNG creates its own emissions through the liquefaction and transportation process, as well as through the drilling and flaring of natural gas in Western Canada.
They argue that building massive LNG terminals that require massive upfront capital investments “locks in” future greenhouse gas emissions at a time when the world needs to be planning for a lower carbon future.
Cedar LNG’s capital cost was originally estimated at US$2.4 billion, but Pembina said Thursday it now estimates capital costs at US$3.4 billion.
& copy 2024 The Canadian Press
