Ovintiv Inc. has entered into a 12‑year agreement with a subsidiary of Pembina Pipeline Corporation to secure 0.5 million tonnes per annum (Mtpa) of liquefaction capacity at the Cedar LNG floating facility in Kitimat, British Columbia. The capacity will become available once Cedar LNG reaches commercial operations, expected in late 2028, allowing Ovintiv to export 0.5 Mtpa of LNG to international markets.
Cedar LNG is a partnership between Pembina Pipeline and the Haisla Nation and is the world’s first Indigenous majority‑owned LNG project. The facility has a nameplate capacity of 3.3 Mtpa; Ovintiv’s 0.5 Mtpa represents a significant share of that capacity. The agreement complements Ovintiv’s existing natural‑gas transportation network and expands its access to Asian LNG markets via the shortest shipping routes from Canada’s west coast.
The deal positions Ovintiv to monetize its Montney gas resources at higher prices in global LNG markets. Meghan Eilers, EVP of Midstream and Marketing, said the agreement “marks a significant advancement in our strategy to expand market access and maximize the profitability of our Montney gas resource through participation in global LNG markets.” The 12‑year term provides long‑term revenue certainty and aligns with Ovintiv’s focus on high‑margin LNG exports.
Cedar LNG received its final investment decision in June 2024 and is slated to be in service in late 2028. The project’s Indigenous partnership and western‑coast location give Ovintiv a competitive edge in accessing Asian demand, supporting Canada’s broader LNG export strategy and aligning with global decarbonization trends.
While the agreement does not disclose specific financial terms, it is expected to generate incremental cash flow once operations commence. Ovintiv’s strong free‑cash‑flow generation and disciplined capital structure position the company to capture upside from the new capacity.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.