Samsung Heavy Industries’ order for a floating liquefied natural gas unit (FLNG) worth approximately KRW 2.101 trillion ($1.5 billion) has been officially confirmed with the developer’s final investment decision (FID).
On June 25, Canadian oil and gas company Pembina Pipeline officially announced on its website that Cedar LNG Partners LP (Cedar LNG), a joint venture between the company and the Haisla Nation, an aboriginal people in British Columbia, Canada, has made a positive final investment decision. It is understood that a final investment decision on the Cedar LNG project was originally planned for the first quarter of 2024 and has since been delayed until mid-2024.
The move also means that Samsung Heavy Industries’ contract to build the Cedar FLNG, signed on December 29, 2023, is officially confirmed, with the order valued at around 2.101 trillion won ($1.5 billion).
According to a statement from Samsung Heavy Industries, the FLNG is being contracted by a consortium of Samsung Heavy Industries and US engineering firm Black & Veatch. Samsung Heavy Industries is responsible for the FLNG hull, LNG containment system and upper module integration, while Black & Veatch is mainly responsible for the FLNG hull and upper module design. In April this year, Samsung Heavy Industries and Black & Veatch have begun execution of the Cedar FLNG front-end engineering and design (FEED) contract, which was awarded in February 2022.
The FLNG, with a capacity of approximately 3 million tons per year, is planned to be extracted from the rich Montney resource area in northeastern B.C. A long-term transportation agreement has been signed for 400 million cubic feet per day on the Coastal Gaslink Pipeline. The FLNG will be located near the Canadian LNG plant and will be powered by renewable energy sources in British Columbia.
The remaining approximately 40 percent of the costs of the Project are expected to be financed through equity contributions from both partners. The Haisla Nation have obtained committed capital through the First Nations Finance Authority to fund their 20 percent equity contribution to the Project. Pembina continues to anticipate its equity contribution will be funded from cash flow from operating activities.
The Cedar LNG project, which is strategically located in Kitimat, British Columbia, Canada, is understood to be 50% owned by Pembina Pipeline and 50% by HighSlope Nation. The Project submitted an application for an Environmental Assessment Certificate (EAC) to the British Columbia Environmental Assessment Agency (BCEAA) in 2021 and subsequently entered a 180-day application review phase.
In March 2023, the project received an EAC from the Province of British Columbia, and in July of the same year, the project received an LNG facility license from the British Columbia Energy Regulator. Upon completion of the regulatory and other approval processes, the project is expected to be operational in 2027.
Notably, as the oil and gas market recovers, Chinese offshore shipbuilder Wison New Energies (Wison) also signed an FLNG EPCIC contract worth $1 billion on June 20, with an estimated contract period of 27 months. The order was awarded by Genting Oil & Gas Sdn Bhd (Genting Group) through two of its subsidiaries, PT Layar Nusantara Gas and Genting Oil &Gas Sdn Bhd.
