Mayer Brown advises PETRONAS on long-term LNG sale and purchase agreement in respect of Cedar LNG Facility

Singapore – Mayer Brown has advised PETRONAS LNG Ltd, a subsidiary of Malaysian multinational oil and gas company Petroliam Nasional Bhd (PETRONAS), on a 20-year liquefied natural gas (LNG) sale and purchase agreement (SPA) with a subsidiary of Pembina Pipeline Corporation (Pembina) for 1 million tonnes per annum (MTPA) of liquefaction capacity at the Cedar LNG facility (Cedar LNG) located in Canada.

The LNG SPA forms part of a synthetic liquefaction service structure for 1 MTPA of capacity, under which Pembina will provide transportation and liquefaction services to PETRONAS LNG Ltd over a 20-year term. The arrangement enables PETRONAS to access an additional natural gas export outlet. This partnership demonstrates the shared commitment of both companies to support energy security and advance the transition to cleaner fuels in Asia and further validates the long-term potential of Canadian LNG given its competitively priced feedstock and advantaged shipping distances to Asian markets.

Cedar LNG is a proposed floating LNG facility in Kitimat, British Columbia, being developed by a partnership between Pembina and Haisla Nation. It also signifies Canada’s push to become a global LNG supplier to Asia. The US$4 billion project is expected to commence commercial operations in late 2028. Upon completion, Cedar LNG is projected to produce 3.3 MTPA.

Mayer Brown’s role included advising PETRONAS LNG Ltd on transaction structuring and the integration of the LNG SPA into the existing synthetic tolling structure at the Cedar LNG Facility, drafting and negotiating the LNG SPA with Pembina, and advising on interface issues with other project documents in respect of the Cedar LNG Facility.

Nick Kouvaritakis, global co-head of our Global Energy practice and global head of LNG, commented: “We are delighted to have helped get this significant deal over the line for PETRONAS and really enjoyed working with both teams on this complex and innovative transaction. We very much look forward to continuing to support PETRONAS on the expansion of its global LNG portfolio.”

The Mayer Brown Global Energy team was led by partner Nick Kouvaritakis, with support from partner Sean Prior and associate Ling Ern Seow.