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Decision made to invest in Canadian floating LNG project powered by hydroelectricity

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Decision made to invest in Canadian floating LNG project powered by hydroelectricity
(photo courtesy Cedar LNG)

The Haisla Nation and Pembina Pipeline Corporation, partners in Cedar LNG Partners LP, announced a final investment decision to proceed with the Cedar LNG Project, a floating liquefied natural gas (LNG) facility on Canada’s West Coast.

The LNG facility will have a nameplate capacity of 3.3 million tonnes per annum and be located in the traditional territory of the Haisla Nation. It will be powered by renewable electricity from BC Hydro.

BC Hydro is a Crown provincial utility. More than 90% of BC Hydro’s generation is produced by hydroelectric power. The company generates more than 43,000 GWh of electricity annually to supply roughly 1.9 million residential, commercial and industrial customers. In April 2024, Hydro Review reported that BC Hydro launched a call for power to ensure access to the clean, affordable electricity needed to power British Columbia’s growing economy and create jobs throughout the province. The utility issued a request for proposals to acquire about 3,000 GWh/y of electricity, which will add 5% to its supply. Electricity demand is expected to increase by 15% between now and 2030.

The LNG project is strategically positioned to leverage Canada’s abundant natural gas supply and deliver a lower-carbon energy option to global markets, according to a release.

The project is expected to be funded with asset-level debt financing for about 60% of the cost. Cedar LNG has secured a construction term loan with a syndicate of banks. The remaining about 40% of the costs 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 its 20% equity contribution. Pembina continues to anticipate its equity contribution will be funded from cash flow from operating activities.

“Together with our partner, the Haisla Nation, we are honored 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. “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.”

“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.”