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
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
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.