Pembina Pipeline Corporation ( PBA ) recently announced that the British Columbia (BC) government has granted environmental certification for its $2.4 billion Cedar liquefied natural gas (LNG) project. Cedar received its first license from the province's energy regulator for approximately 8.5 kilometer pipeline that will connect the project to the Coastal GasLink pipeline.
According to Pembina Pipeline, the project entered into a memorandum of understanding (MOU) with ARC Resources Ltd., oil and gas producer, for 20 years of liquefaction services. They are currently working toward finalizing a supply agreement for 1.5 million tons of LNG per annum (MTPA).
Cedar LNG is a collaboration between indigenous group Haisla Nation and Pembina Pipeline to build a floating LNG facility in Kitimat, British Columbia. It will have the capacity to export 3 MTPA of LNG.
The majority of Cedar LNG Partners' shares is owned by Haisla Nation.
George Heyman, the minister of environment and climate change strategy for the province of British Columbia, stated that the decision was carefully made after considering all environmental impacts and 16 legally binding conditions that Cedar must abide by throughout the project's duration. This would be in addition to other oil and gas emission control regulations that the government is developing.
According to Terry Anderson, president and chief executive officer of ARC Resources, the deal marks a significant step in delivering low-cost, low-emission natural gas to significant demand markets. It also increases ARC's exposure to LNG-linked natural gas prices.
The floating LNG (FLNG) project is anticipated to have an export capacity of 3 million tons per annum and is planned to be built on the territory held by Haisla Nation near Kitimat.
Zacks Rank & Key Picks
Currently, Pembina Pipeline carries a Zack Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI and Valero Energy Corporation VLO, each sporting a Zacks Rank #1, and Murphy USA Inc. MUSA,carrying a Zacks Rank #2 (Buy).
CVR Energy, a diversified holding company with its main office in Sugar Land, TX, is an independent refiner and marketer of high value transportation fuels. Over the past seven days, CVI has seen an upward revision in earnings estimates for 2023 and 2024.
Valero Energy is a global manufacturer and marketer of transportation fuels and petrochemical products.With 15 refineries spread across Canada, the United States and the United Kingdom, it has a daily refining capacity of 3.1 million barrels. Over the past 30 days, VLO has seen an upward revision in earnings estimates for 2023 and 2024.
Murphy USA operates stations close to Walmart supercenters and sells low-cost, high-volume fuel. This helps the company to get a lot more business than its competitors. Another significant competitive advantage for the firm is its access to product distribution centers and pipelines, which helps control costs in the intensely competitive retail sector. Over the past 30 days, MUSA has witnessed an upward revision in earnings estimates for 2024.
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