Samsung Heavy Industries lands US$1.5Bn Cedar LNG FLNG contract

Cedar LNG is a proposed floating liquefied natural gas (FLNG) facility, a partnership between pipeline operator Pembina Pipeline Corp and Haisla Nation. 

As part of the deal, SHI will be responsible for the hull and topside plant processes of the FLNG. The order is estimated at some 2Tn Won (US$1.5Bn). The EPC contract is subject to a final investment decision (FID) being taken. 

Located in Kitimat, British Columbia, the FLNG will have the capacity to export 3M tonnes per year of LNG.

The project’s location will allow it to leverage existing natural gas infrastructure, including the Coastal GasLink pipeline, with which Cedar LNG has a long-term transport agreement, a deepwater port, roads, and other infrastructure. Cedar LNG also received its first permit from the BC Energy Regulator for the 8.5-km pipeline that will connect the project into the Coastal GasLink pipeline.

“This is a critical milestone on our path towards a FID for Cedar LNG, the first Indigenous majority-owned LNG project in the world,” said Cedar LNG chief executive Doug Arnell. “We have secured world-class FLNG expertise and look forward to working with SHI and Black & Veatch to build the LNG facility.” 

Black & Veatch chairman and chief executive Mario Azar said, “Our role in helping Cedar LNG make history on this world-class facility aligns with our commitment to deliver a reliable and resilient global energy supply as a leader in the world’s energy transition.” 

The project now has major regulatory approvals, signed MoUs for long-term liquefaction services for the project’s total LNG capacity, and with the achievement of this milestone, the project is at an advanced stage of planning and development with the operator expected to take a FID by the end of Q1 2024.

Subject to a positive FID, onshore construction work for the project could commence as early as Q2 2024, with the delivery of the FLNG and substantial completion expected in 2028.

British Columbia is home to massive natural gas reserves, estimated at over 2,900 Tn cubic feet, and intends to exploit it. The C$40Bn LNG Canada export terminal near Kitimat counts Shell, Petronas and PetroChina as partners. The project is one of the largest-ever investments in Canada’s history and the first tugs that will assist the gas carriers calling at the facility are nearing completion.