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Chinese Giant Sinopec Eyes Stake in Canadian Cedar LNG Project

China’s state-owned energy giant Sinopec is in talks with Pembina Pipeline Corporation over buying a stake in a planned Canadian LNG project and an offtake agreement for LNG from the facility on the Pacific coast, Reuters reported on Monday, quoting unnamed sources familiar with the development.   

Pembina is a partner in the proposed Cedar LNG floating LNG export facility in Kitimat, British Columbia, alongside the Haisla Nation. Cedar LNG is the world’s first Indigenous majority-owned LNG project and is planned to be developed within the traditional territory of the Haisla Nation.

Together with another project on the Pacific Coast, Shell-led LNG Canada, Cedar LNG – if built – would be one of the first Canadian export projects and would take advantage of the proximity of the Pacific Coast to the key importing markets in Asia.

For its part, Sinopec, the world’s largest refiner by capacity, has already signed a long-term LNG offtake deal with Qatar and has obtained a 5% stake in the development of the huge North Field East (NFE) expansion project.

According to Reuters’ sources, Sinopec is currently in discussions to buy 1.5 million tons of Cedar LNG production per year under an offtake deal with Pembina.

Cedar LNG is planned to produce 3 million metric tons of LNG per annum (MTPA) and is expected to cost about US$4 billion.

The project developers of Cedar LNG said last month that they had issued a Notice to Proceed (NTP) to the engineering, procurement, and construction (EPC) contractors following the finalization of long-term commercial offtake agreements.

The project is continuing to progress toward a final investment decision (FID) by the middle of 2024, with an anticipated in-service date in late 2028.  

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In March 2023, Cedar LNG became Canada’s first Indigenous majority-owned LNG facility to receive an Environmental Assessment Certificate from the British Columbia government and a positive Decision Statement from the federal government.

By Tsvetana Paraskova for Oilprice.com

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