ARC Resources Ltd. announced a long-term sale and purchase agreement with ExxonMobil. (Canva)
KITIMAT, B.C. — Two energy companies operating in Canada are entering a long term natural gas purchasing agreement for the Cedar LNG Facility in Kitimat, British Columbia.
In a March 11th news release, ARC Resources announced it will be selling all liquified natural gas (LNG) produced by the Cedar LNG facility to an affiliate of ExxonMobil.
“Today, we have reached a significant milestone in our strategy to diversify and expand margins through participation in the global LNG market,” says ARC Resources president and chief executive Terry Anderson.
ARC Resources says the agreement will start when the commercial operations of the Cedar LNG facility open in 2028.
“This agreement provides ExxonMobil with advantaged access to Asian LNG markets by establishing ExxonMobil’s first long-term offtake position on Canada’s Pacific Coast,” says Anderson.
The location of the facility allows the project to leverage current LNG infrastructure and access the Coastal GasLink pipeline, which runs from Dawson Creek to Kitimat.
The ExxonMobil LNG Asia Pacific (EMLAP) will purchase all of the Cedar facility’s LNG output, which equals 1.5 million tonnes per annum at international LNG prices.
“We look forward to working with ARC Resources, as we continue to expand and diversify ExxonMobil’s LNG portfolio and provide the lower-emissions energy the world needs,” says Andrew Barry, EMLAP’s vice president of global LNG marketing.
In February, Cedar LNG was announced as one of 18 projects being fast-tracked amid the threat of U.S. tariffs.
The release says ARC Resources has previously entered three long-term agreements that gives access to international LNG pricing.
“Through this agreement, we have achieved our target of linking approximately 25 per cent of our future natural gas production to international pricing,” says Anderson.
ARC Resources recently entered another agreement in partnership between the Haisla Nation and Pembina Pipeline Corporation with regards to the Cedar facility.
This agreement allows ARC Resources to deliver 200 MMcf per day of natural gas to the facility for liquefaction.
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