The first Indigenous owned LNG project in the world is a go.
Partners in the $5.5 billion Cedar LNG project in Kitimat announced a final investment decision (FID) today.
The project will be built by the Haisla First Nation, which owns 50.1 per cent per cent of the project, and Pembina Pipeline Corp. (TSX:PPL; NYSE: PBA), which owns 49.9 per cent.
"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 Haisla Chief Councillor Crystal Smith.
"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."
The Cedar LNG project will be a floating LNG terminal with an annual production capacity of 3.3 million tonnes of liquefied natural gas.
In a video message, Prime Minister Justin Trudeau congratulated the Haisla and Pembina Pipelines for getting the project to the FID stage.
"Thank you for all your hard work to make so many firsts happen right here in Canada: The world's first Indigenous majority owned liquefied natural gas export project. And because of it's electric driven components, the world's lowest carbon footprint LNG facility.
"With Cedar LNG, Haisla Nation has been a leader in demonstrating how Indigenous peoples and governments can and should work together in partnership to create prosperity and opportunities for the next generation," the prime minister said.
"This decision shows not only the perseverance of the Haisla Nation in achieving this historic milestone, but also confidence of investors in B.C.’s economy, and how the future for the natural resources sector is bright and will continue to support B.C.’s strong economic performance, which has led Canada’s large provinces in GDP growth since 2017," B.C. Premier David Eby said in a press release.
"Cedar LNG is a shining example of how natural resource development should work in our province -- in full partnership with First Nations and with the lowest emissions possible."
The estimated capital cost of the Cedar LNG project is US$4 billion ($5.5 billion), with 40 per cent to come from equity investments from the two main partners (Haisla and Pembina), and 60 per cent from debt financing. The Haisla's 20 per cent equity contribution will come from the First Nations Finance Authority.
The floating LNG facility is being designed and built by Samsung Heavy Industries and Black & Veatch. Natural gas will be supplied to the Cedar LNG facility from the Coastal GasLink pipeline, which also will supply natural gas to the nearby $18 billion LNG Canada project.
The project will provide 500 jobs during the construction phase, and 100 in operations, said Josie Osborne, minister of Energy, Mines and Low Carbon Innovation.
"Powered entirely by renewable electricity from BC Hydro, Cedar LNG will be one of the lowest emitting facilities of its kind in the world," Osborne said. "Through a memorandum of understanding, the province will work with the Haisla Nation to enhance the project's environmental performance even further and lower its emissions to near zero by 2030."
“Canada’s emerging liquefied natural gas industry has the potential to position Canada’s west coast as a globally significant energy export hub supplying critical resources to our trading partners while delivering economic benefits to communities in Canada," said Lisa Baiton, president of the Canadian Association of Petroleum Producers (CAPP).
"Congratulations to the Haisla Nation and Pembina Pipeline Corporation for reaching a positive final investment decision on Cedar LNG. The Haisla Nation’s determination and Chief Crystal Smith’s leadership is helping to realize the world’s first Indigenous majority-owned LNG export facility.”
Cedar LNG is projecting an in-service date in late 2028.
