Pembina Pipeline (PPL.TO), opens new tab said on Thursday it has entered into an agreement with Canadian firm ARC Resources (ARX.TO), opens new tab, which will deliver about 200 million cubic feet (mmcf) per day of natural gas for liquefication to the Cedar LNG project.
Under the agreement, ARC Resources will supply natural gas through the Coastal GasLink from its production base in Montney, British Columbia, for a term of 20 years commencing in 2028.
Pembina, which runs the project jointly with Haisla Nation, said the total estimated cost of Cedar LNG, including interest and transaction costs, is about $4 billion. The partners are yet to make a final investment decision (FID), which is expected by mid-2024.
Cedar LNG is pursuing asset-level debt financing for about 60% of the total project cost, the company said.
Subject to a positive FID, the project is expected to generate annual run-rate adjusted core profit of $200 million to $260 million.
Canada-based Pembina also entered a bridging agreement with Cedar LNG for 1.5 million tonnes per annum of LNG capacity.
