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

Catholic church buys $7.5M equestrian facility in Abbotsford, plans ‘agri-retreat’ centre

Church hopes to grow crops, host students and others on Bradner property

Peddaling to put the breaks on cancer

Langley resident joins Ride to Conquer Cancer for second time despite an emotional, rainy first year

PHOTOS: Bradley McPherson still makes his mark, eight years later

Memorial car show spins its tires for murdered man in support of local scholarship

Giddy Up – annual Mustang car show comes to Langley

The Mustang has been on the market for 55 years, and owners gather to celebrate the iconic Ford.

Fort Langley gets set for Summerset

Three-day music festival comes to National Historic Site Aug. 30 to Sept. 1

VIDEO: Facebook rolls out tool to block off-Facebook data gathering

CEO Mark Zuckerberg announced the “clear history” feature more than a year ago

Pembina buying Kinder Morgan Canada and U.S. portion of Cochin pipeline

The deal also includes an Edmonton storage and terminal business and Vancouver Wharves

Trans Mountain gives contractors 30 days to get workers, supplies ready for pipeline

Crown corporation believes the expansion project could be in service by mid-2022

66% of B.C. residents want opt-out system for organ donation: poll

Support was lowest in Ontario and the Atlantic provinces

Teacher disciplined after bringing 45 grams of cannabis to Surrey school

Eugenio Bahamonde was also charged with trafficking in Vancouver, but later acquitted

B.C. rainbow crosswalk covered in mysterious black substance

Black substance spilled intentionally near Vancouver Island school and difficult to remove

New anti-drone tech deployed at Abbotsford Airshow

Operators could locate drones from up to 23 kilometres away

RCMP originally planned to arrest Meng Wanzhou on plane, defence lawyers say

The allegations have not been proven in court. Meng was arrested Dec. 1 at Vancouver airport at the behest of the U.S.

Ethics commissioner ready to testify on Trudeau, SNC-Lavalin: NDP critic

A new poll suggests the report hasn’t so far hurt the Liberals’ chances of re-election this fall

Most Read