The Rise of China’s Gas Ambitions
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China, known for its strategic moves, is currently in discussions with Pembina Pipeline (NYSE:PBA) for a significant liquefied natural gas (LNG) offtake arrangement and an equity stake in the Cedar LNG project situated in Canada, as reported by Reuters on Monday.
The partnership between Haisla First Nation and Pembina (PBA) aims to establish one of Canada’s premier LNG export hubs, with the Cedar project estimated to cost approximately $4 billion. Once operational in 2028, the plant is projected to generate 3 million metric tons of LNG annually, contingent on a final investment decision expected by mid-2024.
Sinopec has expressed a prolonged interest in Canadian LNG export initiatives, seeking to capitalize on gas reserves obtained from Petronas back in 2014, which include gas fields in British Columbia. The company initially intended to export the gas through the Pacific Northwest LNG project owned by Petronas; however, the venture was abandoned in 2017 by Petronas, leaving Sinopec to focus on the domestic Canadian market.
Speculations suggest that Sinopec might be facing pressure from the Chinese government to optimize the profitability of its assets, underscoring the urgency behind its recent negotiations and potential involvement in the Cedar LNG project.