Pembina and PETRONAS Enter Long-Term Agreement for Cedar LNG Capacity

Executive Summary

• Pembina Pipeline and PETRONAS signed a 20‑year agreement for PETRONAS to use 1.0 mtpa of liquefaction capacity at Pembina’s Cedar LNG facility.
• The deal provides Pembina with a stable, take‑or‑pay revenue stream and marks the first step in remarketing the remaining Cedar LNG capacity.
• Cedar LNG remains on schedule and budget, targeting an in‑service date in late 2028; Pembina aims to secure agreements for the final 0.5 mtpa by end‑2025.

Key Details

• Agreement Scope: 20‑year synthetic liquefaction service contract for 1.0 million tonnes per annum (mtpa) of Cedar LNG capacity.
• Parties: Pembina Pipeline Corp. (TSX: PPL; NYSE: PBA) and PETRONAS (via PETRONAS LNG Ltd).
• Revenue Structure: Take‑or‑pay arrangement delivering a long‑term, stable revenue stream to Pembina.
• Strategic Rationale: Enables PETRONAS to secure an additional Canadian natural gas export outlet; supports Pembina’s remarketing strategy for Cedar LNG capacity.
• Previous Commitment: Pembina previously signed a 20‑year take‑or‑pay tolling agreement for 1.5 mtpa in June 2024, intended for later remarketing.
• Future Capacity Remarketing: Pembina expects to finalize agreements for the remaining 0.5 mtpa of Cedar LNG capacity by December 2025.
• Project Status: Cedar LNG (US$4 billion gross) remains on time and on budget; projected in‑service date is late 2028.
• Operational Highlights: Cedar LNG will be a floating liquefied natural gas facility located in Kitimat, BC, powered by renewable electricity from BC Hydro, positioning it as one of the lowest‑carbon intensity LNG projects globally.

Notable Quotes

“This agreement further validates Cedar LNG and highlights the strong demand for global export capacity given the clear advantages of Canadian West Coast LNG…” – Stu Taylor, Senior Vice President & Corporate Development Officer, Pembina.

“It underscores PETRONAS’ role as an integrated energy player and demonstrates our dedication to responsibly monetize our gas resources.” – Shamsairi M Ibrahim, Vice President of LNG Marketing and Trading, PETRONAS Gas and Maritime Business.