Canada’s Pembina Pipeline and the Haisla Nation have signed a heads of agreement with US-based engineer Black & Veatch and South Korean shipbuilder Samsung Heavy to secure access to shipyard capacity for their Cedar floating LNG export project.
According to a statement by Cedar LNG, the deal provides the JV, on an exclusive basis with SHI and Black & Veatch, to “secure access to shipyard capacity to meet Cedar LNG’s target commercial operations date.”
Cedar LNG said the parties expect to finalize a lump sum engineering, procurement, and construction agreement in December of this year.
Pembina and the Haisla Nation each own 50 percent in the Cedar LNG project.
Last year, Black & Veatch and SHI won the front-end engineering and design (FEED) contract for the project’s proposed floating liquefaction, storage and offloading unit (FLNG).
The $2.4 billion FLNG project will have a capacity of about 3 mtpa and will source natural gas from the prolific Montney resource play in northeast British Columbia.
Moreover, Cedar LNG plans to receive feed gas from the Coastal GasLink pipeline, which will supply the giant Shell-led LNG Canada export plant near Kitimat.
The floating LNG facility will also be located near the LNG Canada plant and will be powered by renewable electricity from BC Hydro.
FID may move into early 2024
The JV said this new agreement builds further momentum for the project and follows receipt of all major regulatory approvals and the signing of memorandums of understanding for long-term liquefaction services with “investment grade counterparties” for the project’s total LNG capacity.
Pembina recently said that the partners may move their planned final investment decision on the Cedar LNG export project from the fourth quarter of this year to early 2024.
Target FID continues to be by the end of 2023, however, given the complexity and sequencing of aligning the multiple work streams, which are required to facilitate project financing, FID may move into early 2024, Cedar LNG confirmed in the new statement.
“This exclusive relationship with SHI and Black & Veatch to lock in shipyard capacity for the construction of the Cedar LNG FLNG vessel is a major step forward for our project,” Doug Arnell, Cedar LNG CEO, said.
“Through this agreement we are accessing world class expertise in the construction and delivery of floating LNG production vessels, which, together with renewable power from the BC Hydro grid, will result in an environmentally leading, state-of-the-art facility for Cedar LNG, with one of the lowest carbon footprints in the world,” Arnell said.