India's IOC to Acquire 10% Stake in Petronas' Canadian LNG Export Project
Petroliam Nasional Berhad (Petronas) reported Friday that the company, Progress Energy Canada Ltd. (Progress Energy) and Pacific NorthWest LNG Ltd. (PNW LNG) have signed transaction agreements whereby Indian Oil Corporation Ltd., through its affiliates, will acquire a 10 percent interest in Progress Energy’s LNG-destined natural gas reserves in northeast British Columbia and in the proposed PNW LNG export facility on Canada’s West Coast. As part of the transaction, Indian Oil Corporation Ltd. has also agreed to offtake 1.2 million tons of liquefied natural gas (LNG) per annum, which represents 10 percent of the LNG facility’s production, for a minimum period of 20 years.
This transaction builds upon the two previously announced transactions in 2013 that saw JAPEX Montney Ltd. acquire 10 percent and PetroleumBRUNEI acquire three percent. Following the closing of the Indian Oil Corporation Ltd. acquisition, Petronas will hold 77 percent of the integrated project and will continue to work with potential customers and partners to secure markets for LNG.
“Each of these major investments in British Columbia underscores the globally attractive and competitive opportunities for Canadian natural gas in the Pacific Rim,” said Michael Culbert, president & CEO of Progress Energy, of Calgary.
“We are assembling an industry-leading project and our growing partner list adds momentum to building an exciting new energy export sector for Canada,” added Greg Kist, president of Pacific NorthWest LNG, of Vancouver.
Progress Energy Canada – Building a World-Class Inventory of Natural Gas Resources
Over the past year, Progress Energy and its North Montney Joint Venture (NMJV) partners have more than tripled their natural gas reserves to support LNG exports from northeast British Columbia. An independent 2013 year-end evaluation has estimated the NMJV total proven and probable reserve (2P) additions in 2013 to be 0.96 billion barrels of oil equivalent (boe) or 5.76 trillion cubic feet of equivalent natural gas (Tcfe), a 211 percent increase from the 2012 year-end balance of 0.45 billion boe or 2.68 Tcfe. This results in total 2P reserves at year-end 2013 of 1.39 billion boe or 8.35 Tcfe. In addition, a contingent resource assessment was also completed resulting in a best case contingent resource of 24.7 Tcf with approximately 65 percent of the NMJV land delineated to date.
“This is tremendous accomplishment. In one short year, delineation drilling has established more than half of the 15 Tcf of proven and probable reserves inventory that we plan to have confirmed in order to supply the first 20 years of LNG exports from Pacific NorthWest LNG,” Culbert said.
As the most active driller in British Columbia, Progress plans to continue with its ambitious capital investment in 2014, operating an average of 25 rigs to drill an estimated 170 wells. This activity level and investment has resulted in an estimated 2,500 to 3,000 direct and indirect jobs supporting an LNG export sector in British Columbia.
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