Canadian energy company ARC Resources has entered into a long-term sale and purchase agreement (SPA) with ExxonMobil LNG Asia Pacific (EMLAP).
Under the agreement, EMLAP will buy all of ARC’s LNG offtake from the Cedar LNG Project – approximately 1.5 million tonnes per annum (mtpa) – at international LNG pricing.
The deal starts on the launch of commercial operations at the Cedar LNG Facility in offshore Louisiana, expected late 2028, and will run for the term of ARC’s liquefaction tolling services agreement with Cedar LNG Partners.
Source: Cedar LNG
Terry Anderson, President and CEO of ARC, said the deal marked a significant milestone that will help the company achieve its target of linking approximately 25% of future natural gas production to international pricing.
Andrew Barry, Vice-President Global LNG Marketing for EMLAP, said the deal should deliver advantageous access to Asian LNG markets.
Over the past three years, ARC has entered into three long-term agreements that will provide exposure to international LNG pricing.
In 2022, it announced an agreement to supply 140,000 MMBtu/day of natural gas to Cheniere’s Corpus Christi Stage III expansion, with pricing linked to Platts JKM (Japan Korea Marker).
In 2023, it struck a second agreement with Cheniere to supply 140,000 MMBtu/day to Cheniere’s SPL Expansion Project, with pricing linked to the Dutch Title Transfer Facility.
This deal follows ARC’s recent long-term liquefaction tolling services agreement with Cedar LNG – a partnership between the Haisla Nation and Pembina Pipeline Corporation – where ARC will deliver approximately 200 MMcf per day of natural gas to the Cedar LNG site for liquefaction.
Cedar LNG received final investment decision in June 2024 and peak construction is expected to next year.
Yesterday, US Secretary of Energy Chris Wright approved an LNG export permit extension for Delfin LNG, granting additional time to commence exports from the project, which is proposed for offshore Louisiana.
