Canadian natural gas producer ARC Resources has signed a long-term liquefied natural gas (LNG) sale and purchase agreement (SPA) with ExxonMobil LNG Asia Pacific (EMLAP), an affiliate of the U.S. energy giant ExxonMobil. The LNG will come from a floating liquefied natural gas (FLNG) project under development in Kitimat, Canada’s British Columbia.
Under the deal, EMLAP will purchase all of ARC’s LNG offtake from the Cedar LNG project, or around 1.5 million tonnes per annum (mtpa) of LNG once the Cedar LNG facility enters commercial operation, expected in late 2028. The project is being co-developed by the Haisla Nation and Pembina Pipeline Corporation.
“Today, we have reached a significant milestone in our strategy to diversify and expand margins through participation in the global LNG market. Through this Agreement, we have achieved our target of linking approximately 25 per cent of our future natural gas production to international pricing,” noted Terry Anderson , President and Chief Executive Officer of ARC Resources.
Andrew Barry , Vice President of Global LNG Marketing, ExxonMobil Asia Pacific said the agreement provides ExxonMobil with advantaged access to Asian LNG markets by establishing what he says is ExxonMobil’s first long-term offtake position on Canada’s Pacific Coast.
This SPA follows ARC’s long-term liquefaction tolling services agreement with Cedar LNG under which the Canadian player is set to deliver approximately 200 million cubic feet per day of natural gas to the future LNG project for liquefaction.
With an estimated cost of around $4 billion, the project is thought to be strategically positioned to enable a lower-carbon energy option for global markets. Its location is seen as one of the shortest shipping routes to key Asian markets, with the Douglas Channel leading to and from the site, offering an established shipping route and deepwater marine inlet with year-round ice-free conditions.
The final investment decision (FID) for the project was taken in late June 2024. Samsung Heavy Industries (SHI) and Black & Veatch were selected to provide engineering, procurement, and construction (EPC) for the FLNG, while GTT will design its tank .
The project has faced some legal trouble after Vancouver-based Steelhead LNG filed two lawsuits, one in South Korea against Cedar LNG and SHI, and another in Canada , against Cedar LNG, Pembina Pipeline Corporation, and ARC Resources.