Pembina Pipeline Corporation announced the signing of a 20-year synthetic liquefaction service agreement with PETRONAS LNG Ltd, a subsidiary of Malaysian group Petroliam Nasional Berhad. The agreement covers 1 million tonnes per year of liquefaction capacity at the Cedar LNG project, located on Canada’s West Coast. The deal is part of the country’s strategy to expand its liquefied natural gas (LNG) export infrastructure.
A strategic partnership on Canada’s West Coast
The agreement allows PETRONAS to access an additional export outlet for its upstream gas assets in Canada, while Pembina secures a long-term, take-or-pay revenue stream. This contract model ensures Pembina receives payments regardless of PETRONAS’s actual use of the capacity. The agreement reflects both companies’ intention to secure stable LNG offtake from Canada amid increasing demand in Asia.
The Cedar LNG project, with a gross cost of $4bn (CAD5.48bn), remains on budget and on schedule, with commissioning expected by late 2028. Pembina had already signed a liquefaction agreement for 1.5 million tonnes per year to support the final investment decision taken in June 2024. The agreement with PETRONAS marks a first milestone in the company’s effort to market the remaining capacity.
Increased visibility on project development
According to Pembina, a definitive agreement for the remaining 0.5 million tonnes is expected by the end of 2025. The company is relying on the strategic advantages of the Cedar LNG terminal—such as competitively priced Canadian gas and shorter shipping distances to Asia—to finalise full commercialisation of its available capacity.
PETRONAS is one of the largest gas producers in Canada and a key player in the global LNG market. The company stated that this initiative strengthens the diversification of its supply portfolio while enhancing reliability for its customers. The partnership with Pembina consolidates its North American presence and supports its ongoing strategy to progressively monetise its gas resources.
