Pembina Pipeline Corporation and PETRONAS have signed a 20-year agreement for 1 million tonnes per annum (mtpa) of liquefaction capacity at the Cedar LNG facility in British Columbia, Canada. The long-term contract will see Pembina provide transportation and liquefaction services to PETRONAS LNG Ltd, strengthening the companies’ existing partnership and supporting energy security across Asian markets.

Strategic Partnership and Agreement

The deal involves a synthetic liquefaction service structure with a capacity of 1.0 mtpa, under which Pembina will provide transportation and liquefaction capacity to Petronas LNG Ltd over a 20-year period. It ensures PETRONAS access to an additional gas export outlet from its Canadian upstream assets while offering Pembina a stable, long-term, take-or-pay revenue stream. The agreement highlights both companies’ dedication to developing the Canadian LNG sector and supporting the transition to cleaner fuels in Asia.

Pembina’s Senior Vice President Stu Taylor highlighted that the partnership reflects growing international demand for Canadian West Coast LNG, citing its competitive feedstock prices and shorter shipping distances to Asia.

Commitment to Energy Growth

PETRONAS Vice President of LNG Marketing and Trading, Shamsairi M Ibrahim, noted that the collaboration reinforces PETRONAS’ role as an integrated energy provider, enhancing supply diversity and reliability while aligning with global decarbonization goals.

Project Timeline and Capacity

Pembina 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. This is to ultimately maintain key project timing and economic parameters, with the expectation of remarketing the capacity later. The agreement with PETRONAS marks a significant first step in Pembina’s remarketing efforts. Pembina expects to reach definitive agreements for the remaining 0.5 mtpa of capacity by the end of 2025.

The Cedar LNG project, jointly developed with the Haisla Nation, remains on time and on budget, with an expected in-service date in late 2028.

Company Leadership Perspective

“PETRONAS is a global LNG industry leader and one of the largest gas producers in Canada. This agreement is an extension of our existing relationship with them and an important development in Pembina's ongoing expansion of its export business. This agreement further validates Cedar LNG and highlights the strong demand for global export capacity given the clear advantages of Canadian West Coast LNG, including competitively priced feedstock and advantaged shipping distances to Asian markets,” said Stu Taylor,

Pembina’s Senior Vice President & Corporate Development Officer. “It also demonstrates Pembina’s commitment to delivering growth and executing our strategy within the company's financial guardrails.”

“This milestone reflects PETRONAS’ long-standing commitment to our investment in Canada and our continued effort to fortify our global LNG supply portfolio. We welcome this partnership with Pembina and the Cedar LNG project as it underscores PETRONAS’ role as an integrated energy player and demonstrates our dedication to responsibly monetise our gas resources.

This arrangement improves supply diversity and enhances reliability of supply for customers, while reinforcing our steadfast commitment to deliver reliable, lower-carbon energy solutions to meet Asia’s growing energy needs,” said Shamsairi M Ibrahim, Vice President of LNG Marketing and Trading, PETRONAS Gas and Maritime Business.

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