Petronas plans to invest $20bn in British Columbia project for LNG exports
By JASON NG
Malaysia's state oil and gas company Petroliam Nasional Bhd plans to invest $20 billion in its liquefied natural gas project in West Canada, one of the biggest investments aimed at capitalizing on cheap North American gas, a senior company official said Tuesday.
The company, known as Petronas, is planning two LNG trains of 6 million tpy each under the Pacific NorthWest LNG project by the end of 2019, Anuar Ahmad, head of Petronas' gas and power business, said in an email to Dow Jones Newswires.
The export terminal project in British Columbia was acquired by Petronas last year as part of its $5.2 billion purchase of Canada's Progress Energy Resources. It is just one of several energy companies building LNG export terminals in Canada and the US to create outlets for surplus gas that has resulted from shale-drilling technology unlocking massive new reserves.
Royal Dutch Shell is spearheading one LNG venture at Kitimat, some 200 kilometers from the Petronas one, working with several Asian partners, including Japan's Mitsubishi. Another LNG project is a 50-50 joint venture between Chevron and Apache, also at Kitimat.
TransCanada was picked by Progress Energy to build, own and operate a 5 billion Canadian dollar ($5.1 billion) pipeline that would transport natural gas to the terminal.
The project is crucial for Petronas as well as Malaysia, which has the third-largest oil-and-gas reserves in the Asia-Pacific region, but is struggling to maintain its status as a net exporter of fossil fuels.
Recent new discoveries help to keep reserves up, but maturing oil fields and the interruption of Petronas' oil shipments from South Sudan -- due to a dispute between newly independent South Sudan and its northern neighbour, Sudan -- have intensified Malaysia's search for overseas energy sources.
Petronas aims to make a final investment decision on the West Canada project by the end of 2014 and start commercial operations by the end of 2018.
The Malaysian company is in talks to sell stakes in the project, Mr. Anuar said, after upstream energy company Japan Petroleum Exploration agreed in March to buy a 10% stake.
Petronas is also looking for potential partners to be offtakers of the gas, he added.
Dow Jones Newswires
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