Pembina Pipeline Ltd., a key player in the Cedar LNG project, has reported a surge in interest from potential long-term natural gas suppliers since the project received the green light in June.

The Calgary-based company, in partnership with the Haisla First Nation, made a final investment decision (FID) to proceed with the US$4 billion facility.

Pembina CEO Scott Burrows expressed optimism about the project’s future demand for the uncontracted pipeline capacity, stating that the positive final investment decision has bolstered confidence among potential suppliers. 

“The interest in the project has increased, just given that it’s real in people’s eyes now,” Burrows said during a conference call with analysts. He added that the project’s strategic location and the scarcity of uncontracted LNG capacity on Canada’s west coast position it to command a premium.

The Cedar LNG project, slated to commence construction in mid-2025, will involve the development of a floating liquefied natural gas terminal near Kitimat, British Columbia. The facility will leverage Western Canadian natural gas to produce LNG for export to Asian markets, with a capacity of 3.3 million tonnes per year.

Additionally, the project will be connected to the Coastal GasLink pipeline, which will transport 400 million cubic feet of natural gas daily to the facility. Pembina has already secured a 20-year supply contract with ARC Resources Ltd., covering approximately half of Cedar LNG’s total production.

Pembina senior vice-president Stu Taylor revealed that the company is actively engaged in commercial discussions with other potential suppliers and expects these talks to continue until early 2025.

“We’re in conversations with Canadian producers (about) the opportunity of Cedar possibly being an outlet for Canadian natural gas on a go-forward basis,” Taylor said.

Cedar LNG marks the third LNG export facility in Canada to receive the go-ahead from its proponents. The first one was the Shell-led LNG Canada facility, which is nearing completion near Kitimat. When completed, it will have an export capacity of 14 million tonnes annually.