ARC Resources Signs Long-Term LNG Sale Agreement with ExxonMobil
Canadian natural gas producer ARC Resources has inked a significant deal with ExxonMobil LNG Asia Pacific (EMLAP) for the sale and purchase of liquefied natural gas (LNG) from the Cedar LNG project in Kitimat, British Columbia.
The agreement entails EMLAP purchasing approximately 1.5 million tonnes per annum (mtpa) of LNG from ARC Resources once the Cedar LNG facility becomes operational, which is slated for late 2028. The project, a joint effort between the Haisla Nation and Pembina Pipeline Corporation, aims to tap into global LNG markets.
“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 per cent of our future natural gas production to international pricing,” stated Terry Anderson, President and CEO of ARC Resources.
ExxonMobil’s Vice President of Global LNG Marketing, Andrew Barry, highlighted the strategic advantage of this agreement, providing ExxonMobil with access to Asian LNG markets via Canada’s Pacific Coast for the first time.
Earlier, ARC Resources had secured a long-term liquefaction tolling services agreement with Cedar LNG, under which it would supply 200 million cubic feet per day of natural gas for liquefaction at the future LNG plant.
The Cedar LNG project, with an estimated cost of $4 billion, is strategically positioned to offer a lower-carbon energy solution for global markets. Its location along the Douglas Channel provides a direct shipping route to key Asian markets with year-round ice-free conditions.
In late June 2024, the final investment decision (FID) was made for the project, with Samsung Heavy Industries (SHI) and Black & Veatch selected for the engineering, procurement, and construction (EPC) of the FLNG facility, while GTT will design the LNG tanks.
Despite these advancements, the project has faced legal challenges, including lawsuits filed by Vancouver-based Steelhead LNG against Cedar LNG, SHI, Pembina Pipeline Corporation, and ARC Resources.