Wedoany.com Report-Dec.21, Cedar LNG, a collaboration between the Haisla Nation and Pembina Pipeline Corporation, has finalized a new long-term agreement for its floating liquefied natural gas facility situated in the traditional territory of the Haisla Nation on Canada's West Coast.

Pembina Pipeline Corporation has entered into a 12-year contract with Ovintiv, a major Canadian natural gas producer, covering 0.5 million tonnes per annum of liquefaction capacity. This arrangement completes the allocation of Pembina's 1.5 million tonnes per annum share at the Cedar LNG project.

The agreement supports Pembina's approach to expanding operations while maintaining established financial guidelines and a balanced risk management strategy.

Meghan Eilers, EVP of Midstream and Marketing at Ovintiv, commented: "Today's announcement marks a significant advancement in our strategy to expand market access and maximize the profitability of our Montney gas resource through participation in global LNG markets. We are excited to partner with Pembina to supply low-cost Canadian natural gas to overseas markets, supporting energy security and global emissions reductions."

Ovintiv has secured access to 0.5 million tonnes per annum from the facility's capacity. The Cedar LNG project features a nameplate capacity of 3.3 million tonnes per annum.

Under the terms, Pembina will supply transportation and liquefaction services to Ovintiv for a 12-year period, commencing with the facility's commercial start-up, expected in late 2028. This enables Ovintiv to export 0.5 million tonnes per annum of LNG, enhancing its existing natural gas transportation options with additional international routes.

Exports from Canada's West Coast provide the shortest maritime distance to Asian LNG markets compared to other North American origins.

The Cedar LNG development involves building, commissioning, and operating a floating LNG processing unit and marine export terminal in Kitimat, British Columbia. As an Indigenous majority-owned initiative, the facility will utilize hydroelectric power from British Columbia's grid, enabling production of LNG with a lower carbon profile that can contribute to displacing higher-emission energy sources in international markets.

This 12-year contract follows a previous 20-year agreement with Petronas for 1 million tonnes per annum of Pembina's capacity at the same facility.

The partnership structure and successive commercial agreements underscore progress toward realizing the project's objectives. By securing offtake commitments, Cedar LNG advances toward full utilization of its designed capacity while facilitating greater integration of Canadian natural gas into global supply chains.

The initiative represents a notable example of cooperation between Indigenous leadership and industry partners in developing energy infrastructure. With clean power input and efficient export positioning, the facility is positioned to deliver competitively sourced LNG to demand centers, particularly in Asia, starting from the planned operational timeline.

These developments contribute to broadening market options for Canadian producers and supporting reliable energy flows on an international scale.