A Canadian energy company, Progress Energy Resources, based in Calgary, has agreed to sell 50 per cent its stake in a BC shale gas development called North Montney to Malaysia’s state oil firm Petronas for $1.07 billion Canadian ($1.09 billion US). The two plan to build an LNG export terminal somewhere on the BC West Coast for the export of liguified natural gas to Malaysia and possibly other parts of Asia.
The Progress news release says:
Petronas and Progress will establish an LNG export joint venture (the “LNG Export Joint Venture”) to be 80 per cent [by Petronas] and 20 per cent owned [by Progress], respectively. The LNG Export Joint Venture will launch a feasibility study to evaluate building and operating a new LNG export facility on the West Coast of British Columbia. Petronas would be the operator of this facility, and Petronas and Progress would jointly market the LNG utilizing Petronas’ well-established and extensive network of customers in the largest LNG markets globally.
No location was mentioned for the proposed LNG terminal.
“We look forward to working with West Coast British Columbia communities as we pursue this opportunity to build a new facility that will add value to British Columbia’s natural resourceswhile creating considerable long-term local economic benefits.”
Culbert also said in the news release:
“This is a breakthrough transaction for Progress: the partnership we are launching will enable us to accelerate our growth strategy…. ”We are very pleased to form this long-term partnership with PETRONAS. They share our belief that our North Montney shale assets are a world-class resource that deserves significant investment. We look forward to benefitting from PETRONAS’ significant global expertise including their leadership in developing infrastructure and accessing LNG markets. As well as enhancing Progress shareholder value, this partnership will also generate substantial economic benefits for local communities and the province of British Columbia, while leveraging the environmental benefits of Canada’s abundant and clean-burning natural gas resources globally.
This is the first time that Petronas has entered the Canadian energy market, an indication of the growing scramble in Asia for BC oil shale and likely Alberta oil sands.
Petronas, the national oil and gas company of Malaysia is one of the Fortune Global 500, with oil, gas and petrochemical interests in more than 30 countries. The company calls itself one of the world’s leading LNG companies and is involved in all parts of the LNG business, from liquefaction and shipping to re-gasification and trading. As well as Malaysia, it has assets in Australia, Egypt and the United Kingdom.