In This Article:
Exxon Mobil Corporation XOM has secured a long-term liquefied natural gas (LNG) supply deal with Canadian natural gas producer ARC Resources, marking its first major LNG offtake position on Canada’s Pacific Coast. The agreement, made through ExxonMobil LNG Asia Pacific (EMLAP), will see ExxonMobil purchasing all of ARC’s LNG supply from the Cedar LNG project in Kitimat, British Columbia, once it begins commercial operations in late 2028.
Under the agreement, ExxonMobil will offtake around 1.5 million tons per annum (mtpa) of LNG from Cedar LNG, a floating LNG (FLNG) project co-developed by the Haisla Nation and Pembina Pipeline Corporation. This deal is a key step in ARC’s strategy to diversify its sales and capture global LNG pricing, with CEO Terry Anderson highlighting that it will link 25% of ARC’s future gas production to international markets.
ExxonMobil’s vice president of Global LNG Marketing, Andrew Barry, emphasized the strategic advantage of this agreement, stating that it provides ExxonMobil with direct access to Asian LNG buyers via Canada’s Pacific Coast, an increasingly competitive supply route.
Cedar LNG, estimated to cost around $4 billion, is positioned along the Douglas Channel, offering one of the shortest shipping routes to major Asian markets. Its location provides an established deepwater marine inlet with year-round ice-free conditions, enhancing its appeal as a lower-carbon energy solution for global markets.
The project reached a final investment decision (FID) in June 2024, with Samsung Heavy Industries and Black & Veatch handling engineering, procurement and construction (EPC). GTT will design the FLNG’s tank system. However, Cedar LNG faces legal challenges, including lawsuits filed by Vancouver-based Steelhead LNG in South Korea and Canada, targeting Cedar LNG, Pembina and ARC Resources.
With this agreement, ExxonMobil cements its role in the global LNG market, ensuring long-term supply to Asia while leveraging Canada’s emerging LNG export infrastructure.
XOM’s Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, NextDecade Corporation NEXT and EOG Resources, Inc. EOG. While Archrock presently sports a Zacks Rank #1 (Strong Buy), NextDecade and EOG Resources each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.