Before the first shipment has even been loaded, Pembina Pipeline Corp. is already in talks to double the capacity of the $5.5-billion Cedar LNG project on British Columbia’s coast — underscoring how high the stakes are in the growing North American race to secure long-term liquefied natural gas (LNG) deals in Asia, particularly in Japan.
Pembina CEO Scott Burrows said the company is negotiating definitive agreements with a shortlist of counterparties for its initial 1.5-million-tonne-per-year stake in the floating LNG facility.
Encouraged by early interest, Burrows said talks about a potential second phase — Cedar 2 — are already underway.
Encouraged by early interest, Burrows said talks about a potential second phase — Cedar 2 — are already underway.
“Certainly the gas demand is there,” Burrows told analysts on a conference call Friday. “Based on early-stage negotiations on Cedar capacity, we believe there is demand for a Cedar 2.”
The Cedar project, a joint venture between Pembina and the Haisla Nation in Kitimat, BC, is slated to begin service by late 2028. Calgary-based ARC Resources Ltd. will supply gas from the prolific Montney shale, which straddles northeastern BC and northwestern Alberta.
The push to expand Cedar LNG comes as Canada finds itself in a competitive tug-of-war with the United States to become a preferred LNG supplier for Japan — the world’s second-largest LNG importer after China.
South of the border, US president Donald Trump has resurrected the long-stalled $44-billion Alaska LNG project, which he hopes will secure supply deals with Japanese firms such as JERA and Mitsubishi Corp.
Washington is preparing to host a high-profile energy summit in Alaska in June, where it hopes to lock in commitments.
Meanwhile, Japan is casting a wide net. Its officials are also in advanced talks with QatarEnergy for at least 3 million tonnes annually from its massively expanded North Field. That deal would cement Qatar’s position as Japan’s top LNG supplier even as it opens the door to North American alternatives.
It comes as Alberta Premier Danielle Smith strives to reposition Canada — and Alberta — as a serious player in the global LNG trade after years of mixed signals from Ottawa.
During his time as prime minister, Justin Trudeau infamously stated there was “no business case” for Canadian LNG exports to Europe — a remark that frustrated Western Canadian producers and alienated key allies.
That rhetoric appears to be shifting under Carney’s leadership, though it remains unclear how aggressively the new federal government will pursue long-term LNG diplomacy in Asia, especially as US protectionism under Trump 2.0 ramps up.
Trump’s administration has threatened Canada with energy-sector tariffs and is reportedly conditioning trade negotiations on energy access and auto concessions — although it’s very much a moving target that changes by the day, if not the hour.
On Friday, Pembina reported first-quarter earnings of $502 million, up from $438 million a year ago, and said it remains largely insulated from Dow Inc.’s delay of its Fort Saskatchewan petrochemical project, another major Alberta-based energy initiative that has been blindsided by Trump’s one-man trade war.
As Canada navigates a new era of energy geopolitics, the message from Pembina is clear: Asian buyers are ready. The question is whether Ottawa and provincial governments will move fast enough to keep Canada in the game.
Despite Canada’s geographic advantage — its West Coast terminals offer shorter shipping times to Asia than Gulf Coast or Alaska-based competitors — regulatory hurdles remain a concern.
Federal legislation such as the Impact Assessment Act (Biil C-69) and BC’s climate-focused rules have been cited by industry as key roadblocks to unlocking further LNG potential.
While other Canadian LNG projects such LNG Canada and Woodfibre LNG are moving ahead, Pembina’s willingness to discuss expanding Cedar LNG before the facility is even built reflects growing confidence that demand in Asia, especially from Japan, is not just durable, but accelerating.
The challenge, however, lies in infrastructure.
Burrows cautioned that while the market interest is clear, “a question mark” remains around whether enough pipeline capacity exists to move sufficient volumes of gas from the interior to the BC coast to support both phases.