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

Langley actors up for challenge of period romance

Two TWU students learn how much they have in common with each other and their characters.

VIDEO: This is what buying legal pot in B.C. looks like

Take a look inside B.C.’s first and only legal pot shop located in Kamloops

ELECTION: Langley Township council candidate Michael Pratt

A Voter’s Guide to key election questions.

VIDEO: Fire crew mopping up workshop fire near Golden Ears Bridge

Structure fire at 208 and 102B sending plumes of black smoke into air above Walnut Grove

ELECTION: Langley Township council candidate Eric Woodward

A Voter’s Guide to key election questions.

Mellow opening to B.C.’s only legal pot shop

About five people lined up early for the opening of the BC Cannabis Store in Kamloops.

Great British Columbia ShakeOut earthquake drill reminder

Don’t miss the opportunity to participate in the Great ShakeOut

Jagmeet Singh says marijuana pardons are not enough

Trudeau government will streamline pardon process for Canadians convicted of simple possession of marijuana in the past

BC Ferries begins taking debit in two-month pilot project

Company is giving customers option to use Interac on two-month trial on select vessels

Caregivers banned from smoking, growing cannabis around children-in-care: MCFD

Ministry has limited cannabis use for caregivers, stating it may “pose a risk to children and youth.”

Cheaper strains sell out within minutes on online BC Cannabis Store

Province says new strains will become available in the coming months

Only 40% of B.C. car dealerships have electric cars available: report

Researchers found buyers frustrated at the lack of options

VIDEO: Millionaire Lottery returns to give back and win big

Since 1996, Millionaire Lottery has raised $52 million for the VGH+UBC Hospital Foundation

Most Read