World’s First Indigenous Majority-Owned,
Hydro-Powered, Floating LNG Facility Becomes a Reality
The Haisla Nation and Pembina Pipeline Corporation ("Pembina")
(TSX: PPL; NYSE: PBA), partners in Cedar LNG Partners LP ("Cedar
LNG"), today announced a positive Final Investment Decision ("FID")
on the Cedar LNG Project, a floating liquefied natural gas ("LNG")
("FLNG") facility with a nameplate capacity of 3.3 million tonnes
per annum ("mtpa"), located in the traditional territory of the
Haisla Nation, on Canada’s West Coast (the "Project").
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240625558648/en/
The Project is strategically positioned to leverage Canada’s
abundant natural gas supply and deliver a lower-carbon energy
option to global markets. The facility will be powered by renewable
electricity from BC Hydro, making it one of the lowest emitting LNG
facilities in the world.
"Today, the Haisla Nation, with our partner Pembina, have made
history as the world’s first Indigenous community to develop an LNG
facility as majority owners," said Crystal Smith, Chief Councillor
of the Haisla Nation. "Because of our Nation’s determination and
environmental leadership, Cedar LNG will make the most significant
mark on economic reconciliation ever in our country. With Cedar
LNG, we have proven that Indigenous communities can successfully
forge a path to economic independence and generational prosperity.
We have created a model for how sustainable energy development
should be done, with Indigenous Nations as owners, balancing
environmental interests with global demand for cleaner energy."
Additional comments from Chief Councillor Smith, and other
Haisla Nation members, are offered in a short video about this
historic announcement, which can be accessed here.
"Together with our partner, the Haisla Nation, we are honoured
to have made Cedar LNG a reality. This is a historic moment, and we
are proud to be moving forward with a project that will deliver
industry-leading, low-carbon, cost-competitive Canadian LNG to
overseas markets and contribute to global energy security, while
delivering jobs and economic prosperity to the local region," said
Scott Burrows, Pembina's President and Chief Executive Officer.
"Cedar LNG aligns perfectly with our strategy and where we want to
be as a company moving forward. The Cedar LNG Project will enhance
the resiliency of Pembina’s business, provide much needed new
egress and greater access to global markets for our customers, and
reflects the Haisla Nation and Pembina’s shared values and
commitment to supporting a more sustainable future."
"As a result of the Haisla Nation’s vision and determination,
today we are demonstrating Canada’s ability to sustainably grow its
LNG export sector to support the global clean energy transition,"
said Doug Arnell, Chief Executive Officer of Cedar LNG. "Moreover,
the Haisla Nation and Pembina, as true partners, are demonstrating
a new model for how industry and Indigenous communities can work
together for mutual benefit."
The Right Honourable Justin Trudeau, Prime Minister of Canada
offered his congratulations in a video statement, which can be
accessed here.
The Honourable David Eby, Premier of British Columbia said,
"This decision shows not only the perseverance of the Haisla Nation
in achieving this historic milestone, but also confidence of
investors in B.C.’s economy, and how the future for the natural
resources sector is bright and will continue to support B.C.’s
strong economic performance, which has led Canada’s large provinces
in GDP growth since 2017." Premier Eby added, "Cedar LNG is a
shining example of how natural resource development should work in
our province—in full partnership with First Nations and with the
lowest emissions possible. By working together, we can build a
stronger and cleaner economy that creates opportunities and
benefits for all." Premier Eby’s video statement can be accessed
here.
Cedar LNG Financing Update
The Project is expected to be funded with asset-level debt
financing for approximately 60 percent of the Project cost. Cedar
LNG has secured a construction term loan with a syndicate of
banks.
The remaining approximately 40 percent of the costs of the
Project are expected to be financed through equity contributions
from both partners. The Haisla Nation have obtained committed
capital through the First Nations Finance Authority to fund their
20 percent equity contribution to the Project. Pembina continues to
anticipate its equity contribution will be funded from cash flow
from operating activities. Pembina expects no material change to
its 2024 Cedar LNG equity contributions disclosed previously, with
no incremental post-FID contributions in 2024 anticipated.
Prior to FID, Pembina was required to provide financial
assurances to advance Project-related upstream infrastructure
projects. Following the positive FID, the required financial
assurances will be transferred to Cedar LNG. Cedar LNG has secured
a letter of credit facility for the ongoing funding of the required
financial assurances.
Cedar LNG received strong support from domestic and
international capital providers reflecting the positive merits of
the Project.
Comments from Cedar LNG Supporters
Cedar LNG’s positive FID builds on years of collaboration,
including strong support from neighbouring Indigenous communities,
the District of Kitimat, provincial, and federal governments,
industry, and many others.
ARC Resources
"Congratulations to the Haisla Nation and
Pembina Pipeline on achieving this significant milestone. We are
proud to partner with Cedar LNG on a project that advances
Indigenous economic reconciliation and delivers tremendous economic
benefits to communities and Canadians more broadly," said Terry
Anderson, President and Chief Executive Officer, ARC Resources Ltd.
"The demand for cost-competitive natural gas from key consuming
nations around the world is evident. We look forward to delivering
low-cost Canadian LNG to global markets with partners who share our
commitment to responsible energy development and innovation."
Black & Veatch
"With this fundamental financial milestone
achieved, we’re eager to continue advancing this project by
leveraging our industry-leading PRICO technology and topside
expertise in floating liquefied natural gas infrastructure," said
Brady Hays, Senior Vice President for Black & Veatch’s fuels
and natural resources sector. "We’re proud to be associated with
this project, our partner Samsung Heavy Industries, and other
stakeholders as all of us pursue and deploy technologies that help
lower carbon footprints."
TC Energy / Coastal GasLink
"I want to congratulate the Haisla Nation and
Pembina Pipeline on achieving this tremendous milestone and
recognize how they have redefined the future of energy development
in North America. Through Indigenous-ownership, Cedar LNG will
create opportunities that will support Indigenous and local
communities in northern British Columbia and deliver benefits to
the world by meeting global demand for more secure, affordable and
sustainable energy," said François Poirier, President and CEO, TC
Energy.
LNG Canada
"This remarkable achievement is the result of
years of hard work, careful planning, and innovative thinking from
the Haisla Nation and its members, Pembina Pipeline, and adjacent
and local communities. On behalf of LNG Canada, we offer Cedar LNG
our heartfelt congratulations on the occasion of reaching its final
investment decision and wish them every success as they prepare to
deliver made-in-B.C. LNG to the world," said Jason Klein, President
and CEO, LNG Canada.
District of Kitimat
"We are incredibly happy to celebrate the news
that Cedar LNG will be moving forward. This decision is historic
for the Haisla Nation and significant for all residents in Kitamaat
Village and the District of Kitimat who are seeing our community
continue to grow as an energy hub for the world, said Mayor Phil
Germuth. “Congratulations to the Haisla Nation and to Pembina
Pipeline for reaching today’s milestone."
Cedar LNG Backgrounder
Overview
- Cedar LNG is majority-owned by the Haisla Nation, in
partnership with Pembina Pipeline Corporation, with 50.1% and 49.9%
ownership, respectively.
- The Project is strategically positioned to leverage Canada’s
abundant natural gas supply from the Western Canadian Sedimentary
Basin to access global markets and is expected to achieve higher
prices for Canadian producers and enhance global energy
security.
- Cedar LNG made several innovative design decisions to minimize
the Project’s environmental footprint and ensure it is one of the
lowest-emitting LNG facilities in the world. One of the most
important decisions was to power the facility with renewable
electricity from BC Hydro. In addition, the choice of site location
allows the Project to leverage existing LNG infrastructure,
including the Coastal GasLink pipeline, a deep-water port, roads,
and other infrastructure.
- Under a long-term transportation agreement with Coastal GasLink
Pipeline Limited Partnership, the Cedar LNG facility will receive
400 million cubic feet per day of Canadian natural gas via the
Coastal GasLink pipeline.
- The Project’s West Coast location provides one of the shortest
shipping routes to key Asian markets. The Douglas Channel, leading
to and from the site, offers an established, reliable shipping
route and deepwater marine inlet, with year-round ice-free
conditions.
- The Project has a total estimated cost of approximately US$4.0
billion (gross), including estimated capital costs of approximately
US$3.4 billion (gross), of which US$2.3 billion (gross), or
approximately 70 percent, is under a fixed-price, lump-sum
agreement, and US$0.6 billion (gross) of interest during
construction and transaction costs.
- The FLNG facility is being designed and constructed by Samsung
Heavy Industries and Black & Veatch, global industry leaders in
marine construction and FLNG solutions. As the engineering,
procurement and construction contractors, they bring extensive
qualifications and deep experience to the Project.
- Given the Project will be a floating LNG facility, manufactured
in the controlled conditions of a shipyard, it is expected that the
Project will have lower construction and execution risk.
- The Project is anticipated to be in service in late 2028.
Commercial agreements
- Cedar LNG has secured 20-year take-or-pay liquefaction tolling
services agreements with ARC Resources Ltd. and Pembina for 1.5
mtpa each. Commercial discussions are continuing with multiple
other prospective customers as Pembina intends to assign its
contracted capacity to a third-party.
Significant benefits for Indigenous and local
communities
- Critical to Cedar LNG’s success to date has been the strong
support of neighbouring Nations. Cedar LNG is committed to sharing
value with Indigenous and local communities in the region through
construction jobs and contracting, training opportunities,
long-term employment, and other measures that will contribute to
economic prosperity in the region. The Project is expected to
create up to 500 jobs during peak construction and approximately
100 full-time jobs during operation.
About Cedar LNG
Cedar LNG is a partnership between the Haisla Nation and Pembina
Pipeline Corporation to develop a floating liquefied natural gas
facility in Kitimat, British Columbia, Canada, within the
traditional territory of the Haisla Nation. Strategically
positioned to leverage Canada’s abundant natural gas supply and
BC’s LNG infrastructure, the Cedar LNG facility will be powered by
renewable electricity from BC Hydro, making it one of the lowest
carbon intensity LNG facilities in the world. More information on
Cedar LNG can be found at www.cedarlng.com.
About Haisla Nation
The Haisla Nation is the band government of the Haisla people.
Our mission is to build a powerful, prosperous and proud community,
healthy in mind, body and spirit. We believe in building a strong
and thriving community, with healthy and happy members and a
sustained and prosperous environment. We are about 2023+ people,
with approximately 700 living in Kitamaat Village. We have lived
off the land and waters of our traditional territory for thousands
of years, and it remains the focus of all we do. We believe that
careful and appropriate economic development will bring our people
necessary self-sufficiency. Sustainable and realistic economic
opportunities are increasingly available and promise benefits for
our people – and for every British Columbian. We know that in order
to attain strength and independence our Nation must work together –
with government, business, the community, and internally – with a
spirit of respect and partnership. For more information, visit
www.haisla.ca.
About Pembina
Pembina Pipeline Corporation is a leading energy transportation
and midstream service provider that has served North America’s
energy industry for 70 years. Pembina owns an integrated network of
hydrocarbon liquids and natural gas pipelines, gas gathering and
processing facilities, oil and natural gas liquids infrastructure
and logistics services, and an export terminals business. Through
our integrated value chain, we seek to provide safe and reliable
energy solutions that connect producers and consumers across the
world, support a more sustainable future and benefit our customers,
investors, employees and communities. For more information, visit
www.pembina.com.
Advisors
MUFG Bank, Ltd. acted as financial advisor to Cedar LNG and
Latham & Watkins LLP acted as legal counsel to Cedar LNG on the
project financing. Stikeman Elliott LLP acted as Canadian legal
counsel to Cedar LNG on the project financing and Norton Rose
Fulbright acted as legal counsel for the lenders.
CIBC acted as sole financial advisor to the Haisla Nation in
connection with its financing with the First Nations Finance
Authority. Miller Titerle & Company LLP acted as legal counsel
to Haisla Nation.
For further information:
Footage from the announcement event in Kitamaat Village,
including video content such as speeches and b-roll and
high-resolution photography will be available to download at
www.cedarlng.com/media/ and here.
Forward-Looking Information and Statements
This news release contains certain forward-looking statements
and forward-looking information (collectively, "forward-looking
statements"), including forward-looking statements within the
meaning of the "safe harbor" provisions of applicable securities
legislation, that are based on Cedar LNG's and its partners,
current expectations, estimates, projections and assumptions in
light of its experience and its perception of historical trends. In
some cases, forward-looking statements can be identified by
terminology such as "continue", "anticipate", "will", "expects",
"estimate", "potential", "planned", "future", "outlook",
"strategy", "protect", "plan", "commit", "maintain", "focus",
"ongoing", "believe" and similar expressions suggesting future
events or future performance.
In particular, this news release contains forward-looking
pertaining to, without limitation, the following: expectations
relating to Cedar LNG and the development of the Project, including
the anticipated timing, costs and outcomes in relation to the
Project and expected economic and environmental benefits therefrom;
the design of, and current and future activities and operations
with respect to, the Project, including the anticipated capacity
thereof and expected emissions therefrom; statements regarding the
capital and development costs of the Project, including the
estimated Project costs and the intentions of the Cedar LNG
partners with respect to the financing and funding thereof;
Pembina's intention with respect to assigning its liquefaction
tolling services agreement with Cedar LNG to a third party; and
expectations about industry activities and development
opportunities, including outlooks for future international and
national economic conditions and industry developments.
The forward-looking statements are based on certain assumptions
that the Cedar LNG partners have made in respect thereof as at the
date of this news release regarding, among other things: prevailing
commodity prices, margins and exchange rates; that Cedar LNG's
financial results will be consistent with management expectations;
the availability and sources of capital; estimated operating and
development costs; utilization rates and future demand for
services; the ability to reach required commercial agreements; and
the ability to obtain required regulatory approvals and to comply
with the conditions thereof.
Although the Cedar LNG partners believe the expectations and
material factors and assumptions reflected in these forward-looking
statements are reasonable as of the date hereof, there can be no
assurance that these expectations, factors and assumptions will
prove to be correct. These forward-looking statements are not
guarantees of future performance and are subject to a number of
known and unknown risks and uncertainties that could cause actual
events or results to differ materially, including, but not limited
to: the regulatory environment and decisions and Indigenous and
landowner consultation requirements; the impact of competitive
entities and pricing; reliance on key relationships, joint venture
partners and agreements; labour and material shortages; the
strength and operations of the oil and natural gas production
industry and related commodity prices; non-performance or default
by contract counterparties; actions by governmental or regulatory
authorities, including changes in tax laws and treatment, changes
in royalty rates, changes in regulatory processes or increased
environmental regulation; the ability of Cedar LNG to acquire or
develop the necessary infrastructure in respect of the Project;
fluctuations in operating results; adverse general economic and
market conditions, including potential recessions in Canada, North
America and worldwide resulting in changes, or prolonged
weaknesses, as applicable, in interest rates, foreign currency
exchange rates, inflation rates, commodity prices, supply/demand
trends and overall industry activity levels; constraints on, or the
unavailability of, adequate supplies, infrastructure or labour; the
political environment in North America and elsewhere, and public
opinion; the ability to access various sources of debt and equity
capital; adverse changes in credit ratings; counterparty credit
risk; technology and cyber security risks; natural catastrophes;
and certain other risks detailed in Pembina's Annual Information
Form and Management's Discussion and Analysis, each dated February
22, 2024 for the year ended December 31, 2023, and from time to
time in Pembina's public disclosure documents available at
www.sedarplus.ca, www.sec.gov and through Pembina's website at
www.pembina.com.
This list of risk factors should not be construed as exhaustive.
Readers are cautioned that events or circumstances could cause
results to differ materially from those predicted, forecasted or
projected by forward-looking statements contained herein. The
forward-looking statements contained in this news release speak
only as of the date of this news release. Neither the Haisla Nation
nor Pembina undertakes any obligation to publicly update or revise
any forward-looking statements or information contained herein,
except as required by applicable laws. The forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240625558648/en/
Media Inquiries: Media line 1-844-775-6397
media@pembina.com media@cedarlng.com
Pembina Investor Relations: (403) 231-3156 1-855-880-7404
investor-relations@pembina.com www.pembina.com
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