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

Aldergrove team could return as all-stars on ‘The Amazing Race Canada’

Mother and daughter duo given a second chance, though their fate rests in the hands of voters

PHOTOS: City of Langley library celebrates India’s festival of color

Kids were invited to learn about Holi celebrations, and taste treats.

Aldergrove glow-in-the-dark swim and games for a cause

Township of Langley will celebrate Earth Hour with its first glow-in-the-dark swim in Aldergrove.

Sources Langley Food Bank can’t find a home

Landlords don’t want to rent to the food bank and time is running out

Coach of the year in first season with the Giants

Michael Dyck is being lauded by the Western Hockey League for transforming the junior hockey team

VIDEO: UPDATE: Stolen Bentley nearly causes crash going wrong way on Coquihalla

Owner of Bentley says the vehicle was stolen Thursday and he wants it back

Six ‘distraction thefts’ in two days spark warning to seniors by Vancouver police

Distraction thefts are used to steal jewelry off the necks of unsuspecting women

WestJet sticking with Boeing 737 Max once planes certified to fly

WestJet had expected to add two more of the planes this year to increase its fleet to 13

Motorcyclist dies after three-vehicle crash on old Island Highway

Accident happened at 12:15 p.m. Friday near Country Club Centre in Nanaimo

B.C. driver caught going 207 km/h on motorcycle along Okanagan Highway

A motorcyclist was caught by Kelowna RCMP going 207 km/h on Highway 97C

Protective human chain forms around B.C. mosque for Friday prayer

Vancouver Islanders stand arm-in-arm to show support in aftermath of New Zealand shootings

B.C. fire department offers tips to keep your home safe during wildfire season

With wildfire season getting closer, the Penticton Fire Dept. offer tips to keep your home safe

South Surrey mother guilty of second-degree murder in death of daughter

Lisa Batstone killed eight-year-old Teagan in December 2014

Fierce house cat spotted as ‘aggressor’ in face off with coyote in B.C. backyard

North Vancouver resident Norm Lee captures orange cat versus coyote in backyard showdown

Most Read