ARC Secures LNG Sale to ExxonMobil Using Cedar LNG Offtake

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ARC Secures LNG Sale to ExxonMobil Using Cedar LNG Offtake

ARC Resources Ltd. said Tuesday it has entered into a deal to sell all of its offtake from the under-construction Cedar LNG in Canada to Exxon Mobil Corp. The agreement entitles ExxonMobil LNG Asia-Pacific to about 1.5 million metric tons per annum (MMtpa) of liquefied natural gas (LNG). “The Agreement commences with commercial operations at […]

ARC Resources Ltd. said Tuesday it has entered into a deal to sell all of its offtake from the under-construction Cedar LNG in Canada to Exxon Mobil Corp.

The agreement entitles ExxonMobil LNG Asia-Pacific to about 1.5 million metric tons per annum (MMtpa) of liquefied natural gas (LNG). “The Agreement commences with commercial operations at the Cedar LNG Facility, expected late 2028, and continues for the term of ARC’s liquefaction tolling services agreement with Cedar LNG Partners LP”, Calgary, Canada-based ARC said in an online statement.

Under the tolling services agreement, ARC is to deliver around 200 million cubic feet a day of natural gas to Cedar LNG for liquefaction.

Cedar LNG, 50.1 percent owned by the Haisla Nation with Pembina Pipeline Corp. holding the remaining 49.9 percent, is planned to have a nameplate capacity of 3.3 MMtpa. It is located on tribal land on Canada’s West Coast.

The project has secured all key governmental approvals and is in the early construction stage, Cedar LNG says on its website. The partners reached a final investment decision June 2024.

ARC president and chief executive Terry Anderson said of the agreement with ExxonMobil, “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 percent of our future natural gas production to international pricing”, Anderson said.

This is ARC’s third long-term LNG-related agreement in three years that provides exposure to international LNG pricing, the company said.

In 2022 it announced an agreement to supply 140,000 million British thermal units per day (MMBtud) of natural gas to Cheniere Energy Inc.’s Corpus Christi Stage III expansion with pricing linked to the Platts Japan Korea Marker.

In 2023 ARC announced a second agreement with Cheniere to supply 140,000 MMBtu to the SPL expansion project with pricing linked to the Dutch Title Transfer Facility.

Andrew Barry, vice president for global LNG marketing at ExxonMobil Asia Pacific Pte. Ltd., said, “This Agreement provides ExxonMobil with advantaged access to Asian LNG markets by establishing ExxonMobil’s first long-term offtake position on Canada’s Pacific Coast”.

“We look forward to working with ARC Resources, one of Canada’s largest and most experienced natural gas producers, as we continue to expand and diversify ExxonMobil’s LNG portfolio and provide the lower-emissions energy the world needs”, Barry added.

ExxonMobil itself has four LNG projects under development and expects to surpass 40 MMtpa of LNG sales by 2030.

“The company expects to achieve first LNG sales from the Golden Pass development in the United States and from the Qatar North Field East expansion project near the end of 2025”, ExxonMobil said December 11, 2024, announcing plans through to 2030. “It also is targeting final investment decisions at Papua New Guinea’s Papua project in 2025 and at Mozambique’s Rovuma development in 2026”.

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