Petronas wants a 25% stake in LNG Canada

Petronas wants a 25% stake in LNG Canada

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

kitamaat villagekitimatLNGlng canadaPacific NorthWest LNGShell Canada

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Prince Rupert Port Authority is once again among the sector’s highest environmental performers in the Green Marine environmental certification program. (Photo courtesy PRPA)
Environmental excellence streak continues for Prince Rupert Port Authority

PRPA graded among the highest achievers in Green Marine program

Paving and sidewalk cost replacements being scheduled for 2021 are doubled that of 2019 but remain status quo for 2020 according to Prince Rupert chief financial officer, Corrine Bomben at a regular council meeting on Nov. 23. (Photo: K-J Millar/ The Northern View?
City begins to plan acquisition and construction for capital projects for 2021

Prince Rupert water, sewer, solid waste and paving are being scheduled for 2021

An aerial shot of Cedar Valley Lodge this past August, LNG Canada’s newest accommodation for workers. This is where several employees are isolating after a COVID-19 outbreak was declared last Thursday (Nov. 19). (Photo courtesy of LNG Canada)
41 positive COVID-19 cases associated with the LNG Canada site outbreak

Thirty-four of the 41 cases remain active, according to Northern Health

Kitimat RCMP were requesting assistance locating 24-year-old Teah Wilken, who was last seen getting on a bus at City Centre Mall in Kitimat around 6:30 p.m. Monday (Nov. 23). Kitimat RCMP Facebook photo.
UPDATE: missing woman found safe at residence

Wilken last seen getting on bus at City Centre Mall in Kitimat around 6:30 p.m. Monday (Nov. 23)

Provincial health officer Dr. Bonnie Henry updates B.C.’s COVID-19 situation at the B.C. legislature, Nov. 23, 2020. (B.C. government)
B.C. daily COVID-19 cases hits record 941 on Tuesday

Further restrictions on indoor exercise take effect

(Pixabay.com)
Man, 28, warned by Kootenay police to stop asking people to marry him

A woman initially reported the incident to police before they discovered others had been popped the question

Winston Blackmore (left) and James Oler (right) were sentenced on separate charges of polygamy this week in Cranbrook Supreme Court.
No more charges expected in Bountiful investigation, special prosecutor says

Special prosecutor says mandate has ended following review of evidence from Bountiful investigations

(Ashley Wadhwani/Black Press Media)
Refuse to follow B.C.’s mask mandate? Face a $230 fine

Masks are now required to be worn by all British Columbians, 12 years and older

BC Teachers' Federation President Teri Mooring is asking parents of school-aged children to encourage the wearing of masks when possible in schools. (THE CANADIAN PRESS/Chad Hipolito)
LETTER: Teachers union encourages culture of mask wearing in B.C. schools

BCTF President Teri Mooring asks parents to talk with children about wearing masks in school

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Prime Minister Justin Trudeau speak to the media about the COVID-19 virus outside Rideau Cottage in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Adrian Wyld
Canada’s inability to manufacture vaccines in-house will delay distribution: Trudeau

First doses of COVID-19 vaccine expected in first few months of 2021, prime minister says

Pamela Wright, a UNBC professor in the department of ecosystem science and management, is presented with the Mitacs Award for Exceptional Leadership - Professor, at a virtual ceremony today (Nov. 24) in recognition of her collaborative work with community partners and students to conserve Canada’s northern lands. (Photo submitted by Mitacs)
UNBC professor recieves prestigeous conservation award

Pamela Wright recognized for leadership in ‘breakthrough’ work on northern issues

Pamela Wright, a UNBC professor in the department of ecosystem science and management, is presented with the Mitacs Award for Exceptional Leadership - Professor, at a virtual ceremony today (Nov. 24) in recognition of her collaborative work with community partners and students to conserve Canada’s northern lands. (Photo submitted by Mitacs)
UNBC professor receives prestigious conservation award

Pamela Wright recognized for leadership in ‘breakthrough’ work on northern issues

Most Read