Cedar LNG Announces Positive Final Investment Decision
World’s First Indigenous Majority-Owned, Hydro-Powered, Floating LNG Facility Becomes a Reality
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The Project is strategically positioned to leverage Canada’s abundant natural gas supply and deliver a lower-carbon energy option to global markets. The facility will be powered by renewable electricity from BC Hydro, making it one of the lowest emitting LNG facilities in the world.
"Today, 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," said
Additional comments from Chief Councillor Smith, and other Haisla Nation members, are offered in a short video about this historic announcement, which can be accessed here.
"Together with our partner, the Haisla Nation, we are honoured to have made Cedar LNG a reality. This is a historic moment, and we are proud to be moving forward with a project that will deliver industry-leading, low-carbon, cost-competitive Canadian LNG to overseas markets and contribute to global energy security, while delivering jobs and economic prosperity to the local region," said
"As a result of the Haisla Nation’s vision and determination, today we are demonstrating Canada’s ability to sustainably grow its LNG export sector to support the global clean energy transition," said
The Right
The Honourable David Eby, Premier of
Cedar LNG Financing Update
The Project is expected to be funded with asset-level debt financing for approximately 60 percent of the Project cost. Cedar LNG has secured a construction term loan with a syndicate of banks.
The remaining approximately 40 percent of the costs of the Project are expected to be financed through equity contributions from both partners. The Haisla Nation have obtained committed capital through the
Prior to FID, Pembina was required to provide financial assurances to advance Project-related upstream infrastructure projects. Following the positive FID, the required financial assurances will be transferred to Cedar LNG. Cedar LNG has secured a letter of credit facility for the ongoing funding of the required financial assurances.
Cedar LNG received strong support from domestic and international capital providers reflecting the positive merits of the Project.
Comments from Cedar LNG Supporters
Cedar LNG’s positive FID builds on years of collaboration, including strong support from neighbouring Indigenous communities, the
ARC Resources
"Congratulations to the Haisla Nation and
Black & Veatch
"With this fundamental financial milestone achieved, we’re eager to continue advancing this project by leveraging our industry-leading PRICO technology and topside expertise in floating liquefied natural gas infrastructure," said
TC Energy / Coastal GasLink
"I want to congratulate the Haisla Nation and
LNG Canada
"This remarkable achievement is the result of years of hard work, careful planning, and innovative thinking from the Haisla Nation and its members,
"We are incredibly happy to celebrate the news that Cedar LNG will be moving forward. This decision is historic for the Haisla Nation and significant for all residents in
Cedar LNG Backgrounder
Overview
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Cedar LNG is majority-owned by the Haisla Nation, in partnership with
Pembina Pipeline Corporation , with 50.1% and 49.9% ownership, respectively.
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The Project is strategically positioned to leverage Canada’s abundant natural gas supply from the
Western Canadian Sedimentary Basin to access global markets and is expected to achieve higher prices for Canadian producers and enhance global energy security.
- Cedar LNG made several innovative design decisions to minimize the Project’s environmental footprint and ensure it is one of the lowest-emitting LNG facilities in the world. One of the most important decisions was to power the facility with renewable electricity from BC Hydro. In addition, the choice of site location allows the Project to leverage existing LNG infrastructure, including the Coastal GasLink pipeline, a deep-water port, roads, and other infrastructure.
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Under a long-term transportation agreement with
Coastal GasLink Pipeline Limited Partnership , the Cedar LNG facility will receive 400 million cubic feet per day of Canadian natural gas via the Coastal GasLink pipeline.
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The Project’s
West Coast location provides one of the shortest shipping routes to key Asian markets. The Douglas Channel, leading to and from the site, offers an established, reliable shipping route and deepwater marine inlet, with year-round ice-free conditions.
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The Project has a total estimated cost of approximately
US$4.0 billion (gross), including estimated capital costs of approximatelyUS$3.4 billion (gross), of whichUS$2.3 billion (gross), or approximately 70 percent, is under a fixed-price, lump-sum agreement, andUS$0.6 billion (gross) of interest during construction and transaction costs.
- The FLNG facility is being designed and constructed by Samsung Heavy Industries and Black & Veatch, global industry leaders in marine construction and FLNG solutions. As the engineering, procurement and construction contractors, they bring extensive qualifications and deep experience to the Project.
- Given the Project will be a floating LNG facility, manufactured in the controlled conditions of a shipyard, it is expected that the Project will have lower construction and execution risk.
- The Project is anticipated to be in service in late 2028.
Commercial agreements
- Cedar LNG has secured 20-year take-or-pay liquefaction tolling services agreements with ARC Resources Ltd. and Pembina for 1.5 mtpa each. Commercial discussions are continuing with multiple other prospective customers as Pembina intends to assign its contracted capacity to a third-party.
Significant benefits for Indigenous and local communities
- Critical to Cedar LNG’s success to date has been the strong support of neighbouring Nations. Cedar LNG is committed to sharing value with Indigenous and local communities in the region through construction jobs and contracting, training opportunities, long-term employment, and other measures that will contribute to economic prosperity in the region. The Project is expected to create up to 500 jobs during peak construction and approximately 100 full-time jobs during operation.
About Cedar LNG
Cedar LNG is a partnership between the
About Haisla Nation
The Haisla Nation is the band government of the Haisla people. Our mission is to build a powerful, prosperous and proud community, healthy in mind, body and spirit. We believe in building a strong and thriving community, with healthy and happy members and a sustained and prosperous environment. We are about 2023+ people, with approximately 700 living in
About Pembina
Advisors
CIBC acted as sole financial advisor to the Haisla Nation in connection with its financing with the
For further information:
Footage from the announcement event in
Forward-Looking Information and Statements
This news release contains certain forward-looking statements and forward-looking information (collectively, "forward-looking statements"), including forward-looking statements within the meaning of the "safe harbor" provisions of applicable securities legislation, that are based on Cedar LNG's and its partners, current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as "continue", "anticipate", "will", "expects", "estimate", "potential", "planned", "future", "outlook", "strategy", "protect", "plan", "commit", "maintain", "focus", "ongoing", "believe" and similar expressions suggesting future events or future performance.
In particular, this news release contains forward-looking pertaining to, without limitation, the following: expectations relating to Cedar LNG and the development of the Project, including the anticipated timing, costs and outcomes in relation to the Project and expected economic and environmental benefits therefrom; the design of, and current and future activities and operations with respect to, the Project, including the anticipated capacity thereof and expected emissions therefrom; statements regarding the capital and development costs of the Project, including the estimated Project costs and the intentions of the Cedar LNG partners with respect to the financing and funding thereof; Pembina's intention with respect to assigning its liquefaction tolling services agreement with Cedar LNG to a third party; and expectations about industry activities and development opportunities, including outlooks for future international and national economic conditions and industry developments.
The forward-looking statements are based on certain assumptions that the Cedar LNG partners have made in respect thereof as at the date of this news release regarding, among other things: prevailing commodity prices, margins and exchange rates; that Cedar LNG's financial results will be consistent with management expectations; the availability and sources of capital; estimated operating and development costs; utilization rates and future demand for services; the ability to reach required commercial agreements; and the ability to obtain required regulatory approvals and to comply with the conditions thereof.
Although the Cedar LNG partners believe the expectations and material factors and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially, including, but not limited to: the regulatory environment and decisions and Indigenous and landowner consultation requirements; the impact of competitive entities and pricing; reliance on key relationships, joint venture partners and agreements; labour and material shortages; the strength and operations of the oil and natural gas production industry and related commodity prices; non-performance or default by contract counterparties; actions by governmental or regulatory authorities, including changes in tax laws and treatment, changes in royalty rates, changes in regulatory processes or increased environmental regulation; the ability of Cedar LNG to acquire or develop the necessary infrastructure in respect of the Project; fluctuations in operating results; adverse general economic and market conditions, including potential recessions in
This list of risk factors should not be construed as exhaustive. Readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected by forward-looking statements contained herein. The forward-looking statements contained in this news release speak only as of the date of this news release. Neither the Haisla Nation nor Pembina undertakes any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
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Media Inquiries:
Media line 1-844-775-6397
media@pembina.com
media@cedarlng.com
Pembina Investor Relations:
(403) 231-3156
1-855-880-7404
investor-relations@pembina.com
www.pembina.com
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