Buoyed by higher prices and the growing demand for natural gas to support power generation and the energy transition, new proposals in Malaysia and Canada are targeting the Asian import market, in particular China.
Geographic proximity to this key market is a driving factor behind the economic rationale for the projects in Canada and form a key competitive advantage over other more distant international LNG suppliers.
Two major FLNG developments are in the planning stages for Canadian waters. The Cedar LNG project is based near Kitimat and is backed by the Haisla Nation. Cedar LNG aims to be to be the first majority indigenous-owned LNG export facility in Canada.
The project is being led by the Haisla nation, with Pembina Pipeline Corporation (Pembina), which in June 2021 acquired approximately 50% of equity in the project formerly held by Delfin Midstream and PTE Cedar LP, an energy infrastructure development company. As the majority equity holder, the Haisla Nation seeks to become the first majority indigenous-owned LNG export development.
The cost of the modest 3 mtpa export project is expected to be USD2.4bn with FID due in 2023 and first cargoes in 2027. The Cedar LNG project will exercise an option to source natural gas from the Coastal GasLink pipeline, which is currently under construction as the main supply conduit for the LNG Canada development.
The 670km has seen heavy opposition and protests but is likely to be completed on its target date of 2023. The Ksi Lisims LNG project is another currently in the planning and permitting stage with project participants, the Nisga’a Nation, Rockies LNG Partners and Western LNG, envisioning FID being made in early 2024 with commission due in late 2027 based on a three-and-a-half year construction timeline.
In Malaysia, Petronas has announced preliminary plans for the development of a third FLNG solution, PFLNG Tiga. The tender for the FEED study was issued in August 2021 and targets a near-shore facility with 2 mpta capacity. It is expected the new FLNG facility will be deployed in Malaysian waters although no have been specifics given as to the final location for the vessel’s initial deployment.
“A recap of the projects we covered in the previous FLNG review reveals limited progress in the last six months. Although still in the early planning stages most projects have benefitted from the steep rise in spot LNG prices in 2021, driving investor interest in new LNG capacity.
“Exmar’s Tango FLNG remains available for hire with terms under negotiation with several parties, though high LNG prices have yet to bring the idled facility back online. Nigeria’s surprising FLNG effort from UTM Offshore has gone quiet for now with KBR implementing the FEED contract, which is likely due in for review in 2022,” Fitch says.
