Indian Oil invests in Petronas’s Canada gas assets

Mar 10, 2014 12:00 AM

Petroliam Nasional Bhd's (Petronas) plan to build a liquefied natural gas (LNG) terminal on Canada's Pacific coast edged closer to reality on Friday, as the Malaysian energy giant secured a third equity and offtake partner for the massive gas export project.

Petronas said it would sell state-owned refiner Indian Oil Corp (IOC) a 10% stake in its Pacific NorthWest LNG project, along with a 10% stake in the northern British Columbia shale gas assets that will feed the LNG facility.

India's largest oil refiner also agreed to an offtake deal for 1.2 million tonnes of LNG each year, or about 10% of the project's annual exports.

Petronas's Pacific NorthWest project is just one of about a dozen LNG terminals proposed for British Columbia's rugged Pacific coast, as top global energy firms scramble to build the facilities to export cheap Canadian gas to hungry Asian markets.

The Malaysian state oil firm, which landed on the scene in 2012 with its C$5.2 billion (RM15.6 billion) takeover of Canada's Progress Energy Resources, has moved quickly to leapfrog its rivals. It secured an export permit in December and filed its key environmental documents last month.

Petronas is to build a 12-million-tonne per year terminal near Prince Rupert, along the province's north coast, with first exports in late 2018. The liquefaction and export facilities are expected to cost up to US$11 billion.

Petronas has so far signed on three partners, including Japan Petroleum Exploration Co Ltd and state-owned PetroleumBRUNEI, and will hold a 77% stake when the IOC deal closes.

IOC and Petronas did not disclose the financial details of their deal.

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