ARC Resources has entered a long-term sale and purchase agreement (SPA) with ExxonMobil LNG Asia Pacific (EMLAP), an affiliate of ExxonMobil, for the supply of liquefied natural gas (LNG).
This agreement will see ExxonMobil purchasing approximately 1.5 million tonnes per annum of ARC’s LNG from the Cedar LNG project, with the pricing set at international LNG rates.
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The SPA is set to commence alongside the commercial operations of the Cedar LNG facility, which is expected to be operational by late 2028.
ARC Resources president and chief executive officer Terry Anderson said: “Today, we have reached a significant milestone in our strategy to diversify and expand margins through participation in the global LNG market. Through this agreement, we have achieved our target of linking approximately 25% of our future natural gas production to international pricing.
“We are proud to partner with ExxonMobil – a global energy leader – and demonstrate the critical role that low-cost Canadian natural gas has to play in meeting the world’s growing energy demand.”
Over the past three years, ARC has established three long-term agreements that will enhance its exposure to international LNG pricing.
In 2022, the company secured an agreement to supply natural gas to Cheniere’s Corpus Christi Stage III expansion, with the pricing linked to the Japan Korea Marker (Platts JKM).
The following year, ARC announced another agreement with Cheniere for the SPL expansion project, with pricing tied to the Dutch Title Transfer Facility (TTF).
The recent SPA with ExxonMobil LNG Asia Pacific follows ARC’s liquefaction tolling services agreement with Cedar LNG, a partnership between the Haisla Nation and Pembina Pipeline.
Under this agreement, ARC will deliver around 200 million cubic feet per day of natural gas to the Cedar LNG project for liquefaction.
ExxonMobil Asia Pacific Global LNG marketing vice-president Andrew Barry added: “This agreement provides ExxonMobil with advantaged access to Asian LNG markets by establishing ExxonMobil’s first long-term offtake position on Canada’s Pacific Coast.
“We look forward to working with ARC Resources, one of Canada’s largest and most experienced natural gas producers, as we continue to expand and diversify ExxonMobil’s LNG portfolio and provide the lower-emissions energy the world needs.”
Also, an ExxonMobil-led consortium has unveiled plans for its eighth energy project in Guyana.
The Longtail project is expected to produce up to 1.5 billion cubic feet per day of natural gas and 290,000 barrels per day of condensate.
The floating production facility will also have the capacity to export fuel.
Details of the project, which encompasses the Longtail, Tripletail and Turbot discoveries off Guyana’s coast, were disclosed in a request for environmental authorisation, reported Reuters.
The Longtail development is poised to become Exxon’s most significant gas project in Guyana, aligning with the government’s push to expand gas production for various initiatives including petrochemical plants and LNG ventures.
The project plans to incorporate up to 60 production and injection wells.
