Petronas sells stake in gas project to Sinopec
ReutersPublished: Apr 30, 2014 3:00 AM | Updated: Apr 30, 2014 3:35 AM
A plan by Malaysian state-owned oil firm Petronas to build an US$11 billion liquefied natural gas (LNG) export terminal on Canada’s Pacific Coast gained momentum yesterday, with China’s Sinopec becoming the latest energy player to sign on to the project.
A plan by Malaysian state-owned oil firm Petronas to build an US$11 billion liquefied natural gas (LNG) export terminal on Canada’s Pacific Coast gained momentum yesterday, with China’s Sinopec becoming the latest energy player to sign on to the project.
Petronas said it will sell Sinopec a 15 percent stake in its Pacific NorthWest LNG export facility, along with a 15 percent stake in the northern British Columbia shale gas assets that will feed it.
As part of the deal, Sinopec, China’s largest petrochemical producer, will take 1.8 million tonnes of LNG a year, or about 15 percent of the proposed LNG facility's production, for at least 20 years, Petronas said in a statement.
In addition to its ownership offtake, Sinopec will buy another 3 million tonnes of LNG annually from the terminal, to be located in the small port of Prince Rupert, British Columbia, which is about 1,500 kilometers by road north of Vancouver.
Petronas did not give a value for the Sinopec deal.
Petronas is expected to make a final decision on giving the project the green light by year-end. It says construction will take about four years, with commercial operation expected in early 2019.
Sinopec is Petronas’s fourth partner in the project, which is one of about a dozen LNG terminals proposed for British Columbia’s rugged coastline as energy companies scramble to build facilities to export cheap Canadian gas to Asian markets.
Petronas, which entered the fray in 2012 with its C$5.2 billion (US$4.7 billion) takeover of Canada’s Progress Energy Resources, has moved quickly to hurdle past its rivals in the LNG race. The company has so far secured an export permit and filed its key environmental documents.
Once the deal closes, Sinopec will be the second biggest shareholder in the project behind Petronas, which holds 62 percent. Indian Oil Corp Ltd and JAPEX Montney Ltd each have 10 percent stakes, while Petroleum Brunei holds 3 percent.
The Sinopec deal is subject to approval by the relevant Chinese authorities.
Bank of America Merrill Lynch served as financial adviser to Petronas.
- Reuters
Petronas said it will sell Sinopec a 15 percent stake in its Pacific NorthWest LNG export facility, along with a 15 percent stake in the northern British Columbia shale gas assets that will feed it.
As part of the deal, Sinopec, China’s largest petrochemical producer, will take 1.8 million tonnes of LNG a year, or about 15 percent of the proposed LNG facility's production, for at least 20 years, Petronas said in a statement.
In addition to its ownership offtake, Sinopec will buy another 3 million tonnes of LNG annually from the terminal, to be located in the small port of Prince Rupert, British Columbia, which is about 1,500 kilometers by road north of Vancouver.
Petronas did not give a value for the Sinopec deal.
Petronas is expected to make a final decision on giving the project the green light by year-end. It says construction will take about four years, with commercial operation expected in early 2019.
Sinopec is Petronas’s fourth partner in the project, which is one of about a dozen LNG terminals proposed for British Columbia’s rugged coastline as energy companies scramble to build facilities to export cheap Canadian gas to Asian markets.
Petronas, which entered the fray in 2012 with its C$5.2 billion (US$4.7 billion) takeover of Canada’s Progress Energy Resources, has moved quickly to hurdle past its rivals in the LNG race. The company has so far secured an export permit and filed its key environmental documents.
Once the deal closes, Sinopec will be the second biggest shareholder in the project behind Petronas, which holds 62 percent. Indian Oil Corp Ltd and JAPEX Montney Ltd each have 10 percent stakes, while Petroleum Brunei holds 3 percent.
The Sinopec deal is subject to approval by the relevant Chinese authorities.
Bank of America Merrill Lynch served as financial adviser to Petronas.
- Reuters
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