ARC Resources and ExxonMobil Ink Long-Term Deal for Cedar LNG Project

ARC Resources has secured a long-term deal with ExxonMobil LNG Asia Pacific to supply liquefied natural gas (LNG) from the Cedar LNG Project in Canada. This contract will provide about 1.5 million tonnes per year (mtpa) of LNG, with prices linked to international markets. It is a significant step for both companies as they expand their LNG operations.

Key Terms of the Agreement

The agreement will take effect once commercial operations begin at the Cedar LNG facility in late 2028. ExxonMobil’s Vice President of Global LNG Marketing, Andrew Barry, highlighted that this agreement allows ExxonMobil to access the Asian LNG markets. It marks ExxonMobil’s first long-term offtake position on Canada’s Pacific Coast.

The deal aligns with ARC Resources’ strategy to expand its global LNG presence. ARC has agreed to supply 200 million cubic feet of natural gas per day for processing at Cedar LNG. This partnership with Cedar LNG Partners, a joint venture between Pembina Pipeline and the Haisla Nation, is key to the project’s success.

ARC Resources’ Strategic Move in the Global LNG Market

ARC Resources has secured a long-term deal with ExxonMobil LNG Asia Pacific to supply liquefied natural gas (LNG) from the Cedar LNG Project in Canada. This contract will provide about 1.5 million tonnes per year (mtpa) of LNG, with prices linked to international markets. This agreement is an important step for both companies as they expand their LNG operations globally.

Key Terms of the Agreement

The agreement will take effect once commercial operations begin at the Cedar LNG facility in late 2028. ExxonMobil’s Vice President of Global LNG Marketing, Andrew Barry, emphasized that the agreement enhances ExxonMobil’s access to the Asian LNG markets. This marks ExxonMobil’s first long-term offtake position on Canada’s Pacific Coast.

Moreover, this deal aligns with ARC Resources’ strategy to expand its presence in the global LNG market. ARC has committed to supplying approximately 200 million cubic feet of natural gas per day for processing at the Cedar LNG facility. This arrangement is part of ARC’s ongoing partnership with Cedar LNG Partners, a joint venture between Pembina Pipeline and the Haisla Nation.

ARC Resources’ Strategic Move in the Global LNG Market

Terry Anderson, ARC Resources’ president and CEO, described this agreement as a key milestone in the company’s strategy to diversify and expand margins by tapping into the global LNG market. This agreement links about 25% of ARC’s future natural gas production to international pricing, enhancing its competitive position in the global energy sector. Furthermore, the agreement strengthens ARC’s ability to meet rising global demand for energy while also promoting lower-emissions LNG production.

The Cedar LNG facility, located in Kitimat, British Columbia, plays a crucial role in Canada’s broader energy strategy. The floating LNG terminal will utilize Canada’s vast natural gas resources and British Columbia’s developing LNG infrastructure. By doing so, it will produce cost-effective, low-carbon LNG for global distribution. This project not only addresses the growing global energy demand but also contributes to the reduction of emissions by using cleaner natural gas.

Progress and Future Outlook for Cedar LNG

Construction of the Cedar LNG facility began after the project’s final investment decision was announced in June 2024. The floating terminal is expected to begin operations by late 2028. Additionally, the project includes 20-year take-or-pay liquefaction tolling service agreements. ARC Resources and Pembina Pipeline each secured 1.5 mtpa of LNG production under these agreements.

It’s worth noting that ARC Resources has previously signed several long-term international LNG agreements. In 2022 and 2023, ARC secured contracts with Cheniere, ensuring LNG supplies for Cheniere’s Corpus Christi and SPL Expansion Projects. These agreements are part of ARC’s strategic move to tie its natural gas production to global pricing mechanisms, further expanding its influence in the international LNG market.

Conclusion: A Transformative Partnership

In conclusion, the deal between ARC Resources and ExxonMobil positions both companies strongly in the LNG market, especially in Asia. As the Cedar LNG project moves forward, Canada’s role in the global energy landscape is poised to grow significantly. Furthermore, ARC Resources’ continued focus on securing long-term contracts and expanding its global LNG presence demonstrates its commitment to strengthening its position in the global energy market.