Canada’s $4 Billion Hydro-Powered Floating LNG Project Gets Green Light

Posted by PartYard Marine
Image By Cedar LNG

Cedar LNG, a partnership between the Haisla Nation and Canadian energy firm Pembina Pipeline Corporation, has approved a final investment decision (FID) for a floating liquefied natural gas (FLNG) facility. This facility, with a capacity of 3.3 million tonnes per annum (mtpa), will be located in the traditional territory of the Haisla Nation on Canada’s West Coast.

The project, involving initial groundwork such as tree clearing and grading at the proposed marine terminal near Kitimat, was expected to commence in May 2024. With the FID now confirmed, this venture marks the world’s first indigenous majority-owned FLNG unit powered by hydropower.

Crystal Smith, Chief Councillor of the Haisla Nation, stated, “The Haisla Nation, with our partner Pembina, have made history as the world’s first Indigenous community to develop an LNG facility as majority owners. Because of our Nation’s determination and environmental leadership, Cedar LNG will make the most significant mark on economic reconciliation ever in our country.”

Smith emphasized the project as a model for sustainable energy development, balancing environmental interests with global demand for cleaner energy. Cedar LNG will be powered by renewable electricity from BC Hydro, making it one of the lowest-emitting LNG facilities globally.

Scott Burrows, Pembina’s President and CEO, highlighted the project’s strategic positioning to provide low-carbon, cost-competitive Canadian LNG to global markets while boosting local economic prosperity. “Cedar LNG aligns perfectly with our strategy and where we want to be as a company moving forward,” Burrows added.

The project is expected to be funded through a combination of asset-level debt financing and equity contributions. The Haisla Nation has secured funding for its 20% equity stake through the First Nations Finance Authority, while Pembina plans to fund its share through operational cash flow.

David Eby, Premier of British Columbia, praised the project for exemplifying how natural resource development should be conducted in the province—in partnership with First Nations and with minimal emissions.

The Cedar LNG facility will utilize Canada’s abundant natural gas from the Western Canadian Sedimentary Basin, leveraging existing infrastructure like the Coastal GasLink pipeline, and will be located strategically for access to key Asian markets via the Douglas Channel.

The FLNG facility, designed and constructed by Samsung Heavy Industries and Black & Veatch, aims to minimize environmental impact and construction risks by being manufactured in a controlled shipyard environment. It is expected to be operational by late 2028.

Cedar LNG has secured 20-year agreements for liquefaction tolling services with ARC Resources and Pembina, with ongoing discussions with other potential customers. The project is projected to create up to 500 jobs during peak construction and approximately 100 full-time jobs during operation.

Terry Anderson, President and CEO of ARC Resources, emphasized the global demand for cost-competitive natural gas and the partnership’s commitment to responsible energy development and innovation.

This landmark project not only underscores the growing role of indigenous leadership in major energy projects but also sets a precedent for sustainable and economically beneficial energy initiatives in Canada.

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