By MANIRAJAN RAMASAMY & ANDREW MAYEDA
KUALA LUMPUR (Bloomberg) -- Petroliam Nasional Bhd., is pressing ahead with plans to build a LNG export plant in the Canadian province of British Columbia.
Malaysian Prime Minister Najib Razak hailed the companys plans, announced in 2012, at a press conference with Canadian Prime Minister Stephen Harper in Putrajaya, outside of Kuala Lumpur. This is a very significant landmark decision by Petronas, done in the wake of our friendly relationship, Najib said.
Petronas, completed the $5.1 billion takeover of Canadas Progress Energy Resources in 2012, after Harpers government initially blocked the deal. Najib confirmed in April that he wrote a letter to his counterpart giving assurances of minimal state interference in the oil and gas groups daily operations.
We view Petronas investments very positively, and all the indications I have is that Petronas is looking at further investments, Harper said.
The government of Canada is very excited by that possibility as are all those Ive talked to in the energy sector. The acquisition gave the Southeast Asian group ownership of the second-biggest stakeholder in the Montney shale-gas area of British Columbia, and full control of three Progress Energy fields in which Petronas previously held stakes.
The Petronas terminal will be located in Prince Rupert, British Columbia. Itll process natural gas extracted by Progress Energy and shipped through a pipeline built by TransCanada, according to the projects website.
Najib said Petronas will invest $34 billion to develop the LNG project. The $34 billion figure includes Petronas cost of acquiring Progress Energy, building the terminal and the pipeline, and completing upstream activities such as drilling wells, said Greg Kist, president of Pacific NorthWest LNG, the Petronas-owned company that will operate the LNG terminal. Shipments are expected to begin in 2018, he said.
We have not changed course, Kist said in a telephone interview today from outside Calgary. Were certainly very positive about continuing to move this forward, but the final investment decision will be taken at the end of 2014.
On August 26, Petronas CEO Shamsul Azhar Abbas said it may cut its Progress Energy holding and is talking with potential buyers. The company already agreed in April to sell a stake to Japan Petroleum Exploration Co.