Cheniere Deal Ups Demand for Gas from Canada's ARC Resources

Researched by Industrial Info Resources (Sugar Land, Texas)--ARC Resources Limited (Calgary, Alberta) touted a major win earlier this week when it entered into a long-term supply agreement with Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas) to supply 140,000 million British thermal units per day (MMBtu/d) of natural gas to Cheniere's Sabine Pass complex for a 15-year term. The deal will only add to the growing demand for ARC's Canadian-based product, to which it is responding with drilling expansions. Industrial Info is tracking US$8.6 billion worth of active and planned projects from ARC, the bulk of which are in British Columbia's Montney Shale.

Click on the image at right for a graph detailing ARC's active and planned projects, by industry sector.

ARC says it will utilize its existing contracted pipeline capacity to send feedstock to the U.S. Gulf Coast region, where Cheniere will process it into liquefied natural gas (LNG) for export to Europe and other destinations. ARC already has a long-term agreement to supply 140,000 MMBtu/d to Cheniere's Corpus Christi Stage III Project. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Plant Database can read detailed plant profiles for the Sabine Pass and Corpus Christi facilities.

"With today's announcement, we are advancing the export of low-cost, low-emission Canadian natural gas to consuming markets in Europe," said Jack Fusco, the chief executive officer of Cheniere. "This is the second long-term agreement between Cheniere and ARC Resources, and further progresses the commercialization of the [Sabine Pass] Expansion Project. This agreement will enable Cheniere to deliver increased quantities of Canadian natural gas to Europe, where energy security has never been more important."

Among the most promising gas-exploration projects for ARC is its Attachie West Drilling & Field Expansion Program near Fort Saint John, British Columbia, in the Montney Shale. Starting in March, ARC will construct new well-pads, drill 25 new wells, and conduct extensive 3-D seismic studies to evaluate the Attachie West production field, which the company calls "a condensate-rich natural gas play primed for large-scale development." Another nine-month, 25-well development is expected to begin in March 2025, with more plans proposed for the following years. Subscribers to Industrial Info's GMI Oil & Gas Project Database can read detailed reports on the Attachie West 2024 and 2025 drilling programs.

Earlier this year, ARC started construction on its Attachie West Natural Gas Processing & NGL Production Complex, which is designed for a 90 million-standard-cubic-foot-per-day inlet capacity and a 25,000-barrel-per-day (BBL/d) liquids-handling capacity. It is set to wrap up in the second quarter of 2025. Subscribers can learn more from a detailed project report.

In Alberta's Kaybob-Duvernay Shale, ARC is finishing up its Nest II Field Expansion & Drilling Program for 2023. Starting in March, the company will have built well pads and drilled 48 new wells by mid-December, to supply its gas-processing plant near Grande Prairie, which has an inlet capacity of 260 million standard cubic feet per day and a liquids-handling capacity of more than 8,500 BBL/d. ARC began construction this summer on a plant expansion that would add capacities of up to 90 million standard cubic feet per day and 15,000 BBL/d, respectively, while its 2024 drilling program could drill up to 60 new wells.

Subscribers can read a detailed profile for the Grande Prairie processing plant, and read detailed reports on its expansion and the 2023 and 2024 drilling programs.

"We've communicated a five-year plan that adds significant value through investing in our business," said Terry Anderson, the chief executive officer of ARC, in a recent quarterly earnings-related conference call. "Out towards 2030, ARC will be a larger, more profitable company, with expanded reach to global markets through our LNG agreements. At the same time, the build-out of LNG in Western Canada will fundamentally improve the dynamics of our market, providing additional optionality for value creation along the way."

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of reports for active and planned projects from ARC Resources.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).