Petronas wants a 25% stake in LNG Canada project

Deal is subject to international regulatory approvals

Malaysian oil and gas giant Petronas has announced it intends buying a 25 per cent stake in the LNG Canada project.

Should the purchase go ahead (subject to regulatory approvals and closing conditions) it would make Petronas the second-largest equity owner in the project, behind Shell with 40 per cent, the remainder held by PetroChina with 15 per cent, Mitsubishi Corporation with 15 per cent and Kogas Canada with 5 per cent.

This would also mean Shell would be reducing its share from 50 to 40 per cent, PetroChina from 20 to 15 per cent and Kogas from 10 to 5 per cent. Mitsubishi Corp’s share remains the same at 15 per cent.

This isn’t the first time ownership in the project has changed hands – in 2014 Shell increased its share from 40 to 50 per cent after Mitsubishi and KOGAS reduced their ownership from 20 to 15 per cent. At the time PetroChina kept its ownership at 20 per cent.

Petronas’ intention to buy into LNG Canada follows on Petronas and its partners’ July 2017 decision to cancel the $36-billion Pacific NorthWest LNG project they had planned to build on Lelu Island off Port Edward.

At the time Petronas and its partners cited changes in market conditions, specifically prolonged depressed prices and shifts in the energy industry made, as their reasons for cancelling the project.

LNG prices had been hit by a global oversupply as numerous projects came online, challenging the economics of the development and others that were proposed in the province.

The consortium had already sunk billions into developing the natural gas fields in the northeast B.C. interior.

Earlier this month LNG Canada announced that it had picked Fluor Corp. of Irving, Texas, and JGC Corp., based in Japan, to build the plant in Kitimat should a positive Final Investment Decision be announced.

LNG Canada has said a decision will be made by the end of 2018 whether to go ahead with the $40-billion terminal in Kitimat. The project would also include TransCanada’s proposed $4.7-billion Coastal GasLink pipeline from northeastern B.C. to Kitimat.

A statement released by Shell Canada stressed that Petronas indicating it intends buying a stake in the project “does not amount to an FID, which remains pending”.

“The timing and outcome of an FID will be decided by joint venture participants based on global energy markets, and the overall competitiveness and affordability of the project.”

Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin said the transaction, which is “subject to international regulatory approvals and the completion of other associated agreements”, would be completed in the next few months.

“Petronas is pleased to be part of the LNG Canada project. As one of the world’s largest LNG producers, the company looks forward to adding value to this venture through our long-term expertise and experience across the LNG value chain.”

Ariffin said having an equity position in LNG Canada will allow it to develop its natural gas resource in the North Montney, northeast B.C., through its subsidiary Progress Energy.

“Canada is Petronas’ second largest resource holder after Malaysia, with vast unconventional gas and oil resources in the North Montney. Petronas and its North Montney joint venture partners are one of the largest natural gas resource owners in Canada.”

Kitimat mayor Phil Germuth said the District of Kitimat was elated with the news of the transaction.

“This creates an even greater opportunity for the partners to arrive at a positive Final Investment Decision,” said Germuth. “The District of Kitimat would like to welcome Petronas to Kitimat and we look forward to continuing our relationship with LNG Canada.”

Email the newsroom

Just Posted

Alleged drunk driver survives Saturday Kettle River crash

The car, once removed from the river, will be impounded for 30 days

Fire destroys house in Greenwood on Saturday

Neighbours say the fire started around 11:30 a.m.

Snowfall warning for Kootenay and Paulson passes

Up to 30 cm expected in mountain passes Saturday and Sunday.

Grand Forks residents rally for a ‘fair deal’ in flood buyouts

Demonstrators also criticized how long it has taken to be offered land deals

Police seize drugs, weapons and cash from Christina Lake residence

One man was arrested when RCMP executed a search warrant on Nov. 14

Cold, stormy winter forecast across much of Canada, The Weather Network predicts

In British Columbia temperatures will be slightly above normal and precipitation will be just below normal

UPDATED: Vancouver Island’s Joe gets suspended sentence in Teddy the dog cruelty case

Melissa Tooshley expected in court on Thursday in same case

Nineteen boats carrying invasive mussels stopped at B.C. borders

Waters of Columbia-Shuswap still test mussel-free

Woman ‘horrified’ after being told to trek 200 kilometres home from Kamloops hospital

‘I can’t get from Kamloops back to 100 Mile House injured, confused… no shoes, no clothes whatsoever’

Canadian universities encourage exchange students in Hong Kong to head home

UBC said 11 of its 32 students completing programs in Hong Kong have already left

Midget no more: Sweeping division name changes coming to minor hockey in Canada

Alpha-numeric division names will be used for the 2020-2021 season and beyond

Duncan man gets suspended sentence in Teddy the dog cruelty trial

Joe also gets lifetime ban on owning animals

B.C. pushes for greater industry ‘transparency’ in gasoline pricing

Legislation responds to fuel price gap of up to 13 cents

B.C. woman ordered to return dog to ex-boyfriend for $2,000

After the two broke up, documents state, they agree to share custody of the dog, named Harlen

Most Read