Pembina and PETRONAS sign 20-year Cedar LNG deal, securing capacity, supporting Canadian exports, and advancing cleaner energy supply to Asia.
Pembina Pipeline Corporation and Petroliam Nasional Berhad (PETRONAS) have formalized a 20-year agreement between their respective subsidiaries, securing 1.0 million tonnes per annum (mtpa) of liquefaction capacity at the Cedar LNG facility. The long-term arrangement reflects a strategic collaboration aimed at strengthening Canadian LNG export capabilities and advancing the supply of cleaner energy to international markets, particularly in Asia.
The agreement, structured as a synthetic liquefaction service, allows PETRONAS LNG Ltd to access 1.0 mtpa of Cedar LNG’s liquefaction and transportation capacity over two decades. For PETRONAS, this provides an additional outlet for natural gas originating from its substantial Canadian upstream operations, while Pembina benefits from a predictable, long-term revenue stream backed by a take-or-pay mechanism, along with opportunities for potential value optimization. Beyond the commercial terms, the partnership underscores both companies’ commitment to unlocking the long-term potential of Canadian LNG, enhancing energy security, and supporting the transition to lower-carbon fuel solutions.
Stu Taylor, Senior Vice President and Corporate Development Officer at Pembina, highlighted the strategic significance of the partnership. He noted that PETRONAS is not only a leading global LNG producer but also a major natural gas player in Canada. Taylor emphasized that this agreement extends the existing relationship between the two firms and represents a key milestone in Pembina’s ongoing efforts to expand its LNG export business. He also pointed out that the deal reinforces the competitive advantages of Canadian West Coast LNG, including cost-effective feedstock and shorter shipping distances to high-demand Asian markets. According to Taylor, the agreement exemplifies Pembina’s focus on growth while adhering to disciplined financial management.
From PETRONAS’ perspective, Shamsairi M Ibrahim, Vice President of LNG Marketing and Trading, Gas and Maritime Business, highlighted that the partnership reflects the company’s long-standing commitment to Canadian energy investments and strengthens its global LNG supply portfolio. Ibrahim stated that the agreement demonstrates PETRONAS’ role as a fully integrated energy player and reinforces its dedication to responsibly monetizing gas resources. He emphasized that the collaboration enhances supply diversity, reliability for customers, and the delivery of lower-carbon energy solutions aligned with Asia’s growing energy demand.
This agreement follows Pembina’s earlier 20-year take-or-pay liquefaction tolling service contract for 1.5 mtpa of LNG, signed in June 2024 to support the final investment decision on Cedar LNG. The PETRONAS deal represents a key first step in Pembina’s efforts to remarket the remaining capacity, with the expectation of finalizing arrangements for the additional 0.5 mtpa by the end of 2025.
The Cedar LNG project, with an estimated gross cost of USD 4 billion, continues to progress on schedule and within budget, with operations expected to commence in late 2028. This collaboration between Pembina and PETRONAS not only strengthens North American LNG export infrastructure but also signals a strategic alignment in the global transition toward cleaner, reliable energy sources.
