Pembina Pipeline Corporation says it is in advanced negotiations with potential customers for the Cedar LNG project in Kitimat, and that demand is strong enough to support a second phase of the facility.
The update came during the company’s first quarter earnings call on May 9.
“We are working very hard to turn the definitives into a final executable agreement,” said Pembina president and CEO Scott Burrows. “We’ll do the right deal for Pembina, not the fastest deal.”
Cedar LNG, now under construction, continues to attract interest from natural gas producers looking to access global markets. Burrows said the price gap between Canadian and Asian gas, along with rising production in northeast B.C., is creating favourable conditions for long-term supply agreements.
Pembina is remarketing its 1.5 million tonnes per year share of the project’s export capacity. The company said it has received more proposals than it can accommodate and is now in definitive agreement negotiations with shortlisted customers.
“We believe there is demand for a Cedar 2,” Burrows said, referring to a possible expansion. “But until we have line of sight to that gas on Coastal GasLink or other solutions, that’s kind of the gating item and that’s something that we continue to work on.”
In addition to permitting and public consultations, a second phase would depend on securing additional pipeline access to the West Coast. Pembina said continued growth in the Montney region supports the case for more LNG export capacity.
Cedar LNG is a partnership between Pembina and the Haisla Nation, which owns 51 per cent of the project. Pembina holds the remaining 49 per cent and provides commercial and technical expertise. The project is Canada’s first Indigenous-majority-owned LNG export facility.
Preliminary construction began in late April, with controlled blasting expected to continue through August. That month, Pembina awarded the pipeline contract to Ledcor Haisla Limited Partnership, a joint venture with longstanding ties to the region. Full construction is expected to begin in the second quarter, with hiring and site preparation already under way. Preference is being given to Haisla and other Indigenous applicants.
Kitimat council has also advanced the permitting process for a temporary laydown yard to support the project. The site will be used to store equipment, place trailers and organize crews. Cedar LNG expects the project to generate more than $30 million in tax revenue during construction and over $13.5 million annually once operational.
