A liquefied natural gas project in British Columbia led by
Malaysia’s state-owned Petronas continues to gather momentum with the addition
of a fourth Asian partner.
China Petrochemical Corp. (Sinopec) has agreed to take a
15-per-cent equity stake in the Pacific Northwest LNG project, it was
announced.
Sinopec has also agreed to purchase three million tonnes per
year of LNG over 20 years, sourced primarily from Pacific Northwest, in
addition to 1.8 million tonnes yearly in an equity offtake.
The deal follows on an agreement struck less than two months ago
with state-owned Indian Oil Corporation Limited, which is taking a 10-per-cent
stake in Pacific Northwest.
The other partners are Japan Petroleum Exploration Co. Ltd.,
through Japex Montney Ltd., with 10 per cent, and PetroleumBrunei with 3 per
cent.
This latest transaction agreement boosts Pacific Northwest’s
prospects. It is one of 14 projects proposed for British Columbia’s coast
intended to feed growing Asian demand for natural gas.
But only three or four of the capital-intensive proposals will
actually end up being built, according to some experts.
“While the market has known for some time that a large Asian
party has been in negotiations with Petronas, the agreement is still showing
that Canadian LNG momentum is gathering visibility,” Dundee Capital Markets
analyst Maxim Sytchev said in a research note.
“The geopolitical uncertainty in Europe where energy has once
again become a policy tool, makes the potential Canadian supply an attractive
option from a supplier perspective.”
Once the Sinopec and Indian Oil transactions close, Petronas
will own 62 per cent of Pacific Northwest, Sinopec and its affiliates Progress
Energy Canada Ltd. and Pacific Northwest LNG Ltd. said in a news release.
“We are pleased to conclude the addition of another Pacific Rim
market and investment into British Columbia which continues to highlight the
attractiveness of Canadian natural gas,” said Michael Culbert, president and
chief executive officer of Calgary-based Progress Energy.
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