Pembina Pipeline Corporation (TSX: PPL; NYSE: PBA) and Petroliam Nasional Berhad (PETRONAS) have entered into a 20-year agreement securing 1.0 million tonnes per annum (mtpa) of liquefaction capacity at the Cedar LNG facility. Under the agreement, Pembina will provide PETRONAS LNG Ltd with long-term transportation and liquefaction services, strengthening both companies’ positions in the global liquefied natural gas (LNG) market and advancing the development of low-emission energy exports from Canada’s West Coast.
The agreement, structured as a synthetic liquefaction service arrangement, grants PETRONAS an additional outlet for its extensive upstream natural gas production in Canada while offering Pembina a stable, take-or-pay revenue stream. The partnership underscores the shared goal of both companies to promote energy security, cleaner fuels, and long-term LNG growth for the Asia-Pacific region.
Stu Taylor, Senior Vice President & Corporate Development Officer at Pembina, stated “This agreement strengthens our longstanding relationship with PETRONAS and highlights growing global demand for LNG export capacity. The Cedar LNG project is uniquely positioned to capitalize on the advantages of Canada’s West Coast, including competitive gas feedstock and shorter shipping routes to Asia. This partnership is another milestone in executing Pembina’s export growth strategy responsibly and sustainably.”
Shamsairi M. Ibrahim, Vice President of LNG Marketing and Trading at PETRONAS Gas and Maritime Business, added “Our agreement with Pembina and Cedar LNG reinforces PETRONAS’ long-term commitment to Canada and our mission to deliver reliable, lower-carbon energy solutions. This partnership enhances our global LNG supply diversity and strengthens our ability to meet Asia’s increasing demand for sustainable energy.”
Pembina had previously signed a 20-year take-or-pay liquefaction tolling agreement for 1.5 mtpa to support the project’s final investment decision (FID) in June 2024. The new PETRONAS agreement represents a major step in remarketing that capacity, with Pembina expecting to finalize arrangements for the remaining 0.5 mtpa by the end of 2025.
The US$4 billion Cedar LNG project, developed in partnership with the Haisla Nation, remains on schedule and within budget, with operations targeted to commence by late 2028. Once operational, Cedar LNG will be among the world’s lowest-carbon LNG facilities, playing a vital role in Canada’s energy transition and contributing to global emissions reduction through cleaner energy exports.