Energy News Beat
Under the SPA, ExxonMobil LNG Asia Pacific (EMLAP) will purchase all of ARC’s LNG offtake from the Cedar LNG project – about 1.5 million tonnes per annum – at international LNG pricing, according to a statement by ARC Resources.
The agreement starts with commercial operations at the Cedar LNG facility, expected late 2028, and continues for the term of ARC’s liquefaction tolling services agreement with Cedar LNG Partners, it said.
In June last year, Canada’s Pembina Pipeline and the Haisla Nation took a positive final investment decision on their $4 billion Cedar LNG project.
Cedar LNG has secured 20-year take-or-pay liquefaction tolling services agreements with ARC Resources and Pembina for 1.5 mtpa of LNG each.
It also signed a 20-year take-or-pay fixed toll contract with ARC Resources.
As part of the agreement, ARC Resources will supply Cedar LNG with about 200 million cubic feet per day of Canadian natural gas for liquefaction at the Cedar LNG facility.
“Today, we have reached a significant milestone in our strategy to diversify and expand margins through participation in the global LNG market. Through this agreement, we have achieved our target of linking approximately 25 percent of our future natural gas production to international pricing,” said Terry Anderson, president and CEO, ARC Resources.
Over the past three years, ARC has entered into three long-term agreements that will provide exposure to international LNG pricing.
In 2022, ARC announced an agreement to supply 140,000 MMBtu/day of natural gas to Cheniere’s Corpus Christi Stage III expansion with pricing linked to Platts JKM.
In 2023, the company announced its second agreement with Cheniere to supply 140,000 MMBtu/day to Cheniere’s SPL expansion project with pricing linked to the Dutch TTF.
Andrew Barry, VP global LNG marketing, ExxonMobil Asia Pacific said this deal with ARC Resources provides ExxonMobil with “advantaged access to Asian LNG markets by establishing ExxonMobil’s first long-term offtake position on Canada’s Pacific Coast.”
“We look forward to working with ARC Resources, one of Canada’s largest and most experienced natural gas producers, as we continue to expand and diversify ExxonMobil’s LNG portfolio,” he said.
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