Malaysian oil and gas giant Petronas has become the holder of a 25 per cent stake in the LNG Canada project.
The deal makes 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.
“LNG Canada formally welcomes Petronas as our fifth Joint Venture Participant following a deal close this month,” said LNGC spokesperson Susannah Pierce. “You’ll continue to see LNG Canada as your day-to-day liaison with the community, First Nations and our stakeholders, so nothing changes in that regard.”
Petronas’ intention to buy into the project was announced in June, the deal subject to regulatory approvals and closing conditions. The closing conditions were removed earlier this month, paving the way for the deal to go ahead.
“Petronas shares our strong commitment to the community, First Nations and government, and brings decades of LNG experience in construction and operations to LNG Canada, which will benefit our project as we move closer to a Final Investment Decision,” said Pierce.
Petronas’ successful bid for the 25 per cent stake sees Shell reducing its share of the project 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.
Announcing Petronas’ intention to buy into the project in June, Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin said having an equity position in LNG Canada would 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.”
This isn’t the first time ownership of equity in the project has changed - 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 followed 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.
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