Canada’s LNG export sector continues to take shape along the West Coast, and one of the most closely watched projects is Cedar LNG, a floating liquefied natural gas (FLNG) facility being developed by Pembina Pipeline Corporation in partnership with the Haisla Nation.
During Pembina’s Q3 2025 earnings call, management provided a detailed update confirming that the project remains on schedule, on budget, and nearing full commercial contracting, reinforcing Cedar LNG’s position as one of Canada’s most advanced next-wave LNG developments.
Cedar LNG Project Overview
Cedar LNG is a proposed floating LNG export terminal located near Kitimat, British Columbia, adjacent to existing LNG infrastructure on Canada’s West Coast.
Key Project Details
- Developer: Pembina Pipeline Corporation (with the Haisla Nation as partner)
- Facility Type: Floating LNG (FLNG)
- Designed Capacity:
- Originally permitted for 3.0 million tonnes per annum (MTPA)
- Optimized engineering now supports up to 3.3 MTPA
- Feed Gas Capacity:
- Increased from ~400 MMcf/d to up to 500 MMcf/d
- Target In-Service Date: Around 2030
- Commercial Structure: Long-term, take-or-pay tolling agreements
Unlike traditional LNG export projects, Cedar LNG uses a floating production vessel, significantly reducing construction complexity, environmental footprint, and permitting risk compared to large onshore terminals.
Pembina has emphasized that Cedar LNG is structured to fit within its core midstream model — prioritizing long-term contracted, fee-based cash flow rather than commodity price exposure.
Commercial Progress: PETRONAS Agreement
One of the most significant updates from the earnings call was the announcement of a 20-year LNG tolling agreement with PETRONAS, one of the world’s largest LNG operators and one of Canada’s largest natural gas producers.
Contract Highlights
- 1.0 MTPA of liquefaction capacity contracted
- 20-year term
- Structured as a synthetic tolling arrangement
- Maintains Pembina’s financial guardrails by limiting price exposure
Pembina had previously secured 1.5 MTPA under long-term contracts, allowing the project to reach final investment decision in 2024. With the PETRONAS agreement now in place:
- 2.5 MTPA of total capacity is contracted
- The remaining 0.5 MTPA is expected to be finalized by year-end 2025
Management stated that contracting progress continues to align with expectations and that interest remains strong given the scarcity of permitted Canadian LNG export capacity.
Construction Update: On Time and On Budget
Pembina confirmed that Cedar LNG remains firmly on schedule.
Construction Progress Includes:
- Floating LNG vessel:
- Hull and topside fabrication progressing as planned
- Onshore facilities:
- Construction substantially advanced
- Pipeline construction:
- Ahead of schedule
- All horizontal directional drill crossings completed
- Management highlighted this as a major de-risking milestone
Importantly, Pembina reiterated that the recent increase in permitted feed gas capacity does not change the project’s capital cost estimates. Engineering optimizations allowed the facility to increase throughput for minimal incremental capital.
Incremental Upside Beyond Base Contracts
While Cedar LNG is contracted at 3.0 MTPA, Pembina confirmed that:
- The facility is being built to 3.3 MTPA capability
- The feed gas amendment to 500 MMcf/d allows for:
- Incremental LNG cargoes during peak operating periods
- Additional marketing upside beyond contracted volumes
Any production above the contracted base represents potential incremental revenue, providing optionality without increasing project risk.
Financial Outlook
During construction, Cedar LNG contributes modest accounting losses related to financing and hedging activity. However, Pembina expects:
- Positive cash flow beginning around 2030, once the facility enters service
- Long-term, stable earnings supported by take-or-pay contracts with investment-grade counterparties
Management emphasized that Cedar LNG fits squarely within Pembina’s long-term strategy of building resilient infrastructure with predictable cash flows.
Why Cedar LNG Matters
Pembina views Cedar LNG as more than a standalone export terminal.
Strategically, the project:
- Provides direct access to global LNG markets
- Creates a new long-term outlet for Western Canadian natural gas
- Strengthens demand visibility for Montney and Western Canadian Sedimentary Basin production
- Enhances Pembina’s integrated value chain across gas gathering, processing, pipelines, and exports
The company described Cedar LNG as a scarce Canadian LNG asset, noting that the PETRONAS agreement further validates the project’s competitiveness on a global scale.
Outlook
With construction progressing smoothly, long-term contracts nearly complete, and capacity expansion already embedded into the design, Cedar LNG is emerging as one of the most advanced LNG export projects under development in Canada.
Pembina expects to provide additional updates as remaining capacity is finalized and as the project moves closer to full construction execution — positioning Cedar LNG to become a key contributor to Canadian LNG exports in the next decade.
