- ARC Resources (TSX:ARX) will supply liquefied natural gas to ExxonMobil LNG Asia Pacific under a 20-year contract beginning in 2028
- The contract specifies deliveries of about 1.5 million tons per year
- ARC is a pure-play, low-cost Montney producer and one of Canada’s largest dividend-paying energy companies
- ARC Resources stock has added 11.52 per cent year-over-year and 639.28 per cent since 2020
As U.S. President Donald Trump’s 10 per cent tariff on Canadian energy imports threatens to weaken the supply chain, suppliers are being incentivized to look overseas, with Tuesday’s deal between ARC Resources (TSX:ARX) and ExxonMobil LNG Asia Pacific highlighting this ongoing trend.
The ExxonMobil affiliate will purchase approximately 1.5 million tons of liquefied natural gas per year from ARC’s Cedar LNG Facility in British Columbia, which is expected to begin commercial operations in late 2028. The agreement will apply across ARC’s 20-year liquefaction tolling services agreement with Cedar LNG Partners LP.
The news follows ARC’s 2022 agreement to supply 140,000 MMBtu/day of natural gas to Cheniere’s Corpus Christi stage-III expansion, and its 2023 agreement, again with Cheniere, to supply 140,000 MMBtu/day to the SPL Expansion Project.
Leadership insights
“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 per cent of our future natural gas production to international pricing,” Terry Anderson, ARC Resources’ president and chief executive officer, said in a statement. “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.”
“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,” added Andrew Barry, vice president global LNG marketing, ExxonMobil Asia Pacific.
About ARC Resources
ARC is a pure-play, low-cost Montney producer and one of Canada’s largest dividend-paying energy companies.
ARC Resources stock (TSX:ARX) is up by 1.98 per cent trading at C$25.50 per share as of 10:48 am ET. The stock has added 11.52 per cent year-over-year and 639.28 per cent since 2020.
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