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

Wind project between Haida Gwaii and Prince Rupert moves forward once more

Naikun Wind Energy Group announced partnership with major offshore wind development company

Adverse weather forces ferry schedule change

Thursday’s Skidegate to Prince Rupert route affected

Coast Mountain College announces interim president

Ken Burt, current president and CEO, will say goodbye to CMNT come September

Queen Charlotte crackdown

RCMP target impaired driving amidst rising numbers of the offence

Australian gold mining giant acquires Red Chris mine

Newcrest now owns 70 per cent of the mine south of Iskut and operatorship

B.C. sockeye returns drop as official calls 2019 ‘extremely challenging’

Federal government says officials are seeing the same thing off Alaska and Washington state

Expanded support to help B.C. youth from care attend university still falling short

Inadequate support, limited awareness and eligibility restrictions some of the existing challenges

Ethnic media aim to help maintain boost in voting by new Canadians

Statistics Canada says new Canadians made up about one-fifth of the voting population in 2016

Cross-examination begins for B.C. dad accused of killing young daughters

Andrew Berry is charged in the deaths of six-year-old Chloe and four-year-old Aubrey in 2017

Dog attacked by river otters, Penticton owner says

Marie Fletcher says her dog was pulled underwater by four river otters in the Penticton Channel

BC SPCA overwhelmed with cats, kittens needing homes

Large number of cruelty investigations, plus normal ‘kitten season’ to blame

B.C. Hydro applies for rare cut in electricity rates next year

Province wrote off $1.1 billion debt to help reverse rate increase

Speculation tax forces sale of Greater Victoria’s iconic ‘Tulip House’

Bob and Jan Fleming selling their retirement home famous for its thousands of tulips

Most Read