KUALA LUMPUR: In a move to further cement its planned C$36bil (RM107bil) natural gas investment in British Columbia, Canada, Petroliam Nasional Bhd (Petronas) has inked a letter of intent with the government of British Columbia to sign a project development agreement by end-November.
Petronas global liquefied natural gas (LNG) projects, upstream business vice-president Adnan Zainal Abidin said that the project was expected to come through in early 2019 if the final investment decision was made by the year-end.
British Columbia Premier Christy Clark said the signing was a milestone to a final investment decision, adding that Petronas was the first of its partners to sign on.
British Columbia Natural Gas Development Minister and Deputy Premier Rich Coleman told reporters that they were now sorting out issues regarding the tax regime and hoped the negotiations among the partners could be concluded by the year-end.
Coleman estimated a production of 24 million tonnes of LNG per year if there were five to six big LNG plants in operation and that would last Petronas for 40 to 50 years.
“At 30% gas recovery, they will have 100 years with the gas (supply),” he said, adding that Petronas was making the right moves as the gas fields there were among the best assets.
Petronas bought Progress Energy Canada Ltd, which owns the rights to gas assets in British Columbia, for C$5.2bil in 2012.
“Now they (Petronas) are spending a few billion dollars more to build up the supply for the LNG (project) and they would have identified more partners and get prepared for the pre-engineering to get the whole package before the whole final investment decision, hopefully by the end of this year,” he said.
Last week, the state-owned O&G firm roped in Sinopec as its latest investing partner in the Pacific Northwest LNG project with a 15% stake.
Previously, Indian Oil Corp Ltd and Japan Petroleum Exploration acquired 10% each while Petroleum Brunei bought 3%.
Each of the partners will off-take a volume of LNG pro rata to their upstream and downstream equity interest in the project, Petronas said in a previous statement.
That leaves Petronas with a 62% stake in the Canadian LNG project.
Petronas president and chief executive officer Tan Sri Shamsul Azhar Abbas had earlier indicated that it planned to retain 50% of the Canadian project, which meant that it had a further 12% to sell off.
Clark, who focuses on the development of the province’s natural gas sector, said that her government had created a special cabinet to oversee the progress of the energy industry there and to fill in the gaps for the better facilitation of processes for foreign investors.
She added that the cold climate there meant less energy was required to liquefy natural gas and that its proximity to Asia would reduce shipping time while the political stability would ensure the security of supply.
On top of that, she said a 10-year skills plan to re-engineer education and training was developed last year to ensure there was a steady supply of skilled talents in the workforce to support the growth of the natural gas industry there.
Source: www.thestar.com.my
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British Columbia Premier Christy Clark visited the Petronas Twin Towers and met with PETRONAS President and Chief Executive Officer, Tan Sri Shamsul Azhar Abbas |
