Petronas Sells 15% Stake in Canadian LNG Project to Sinopec

Petronas and its subsidiaries Progress Energy Canada Ltd and Pacific NorthWest LNG Ltd have sold 15 per cent stake in Progress Energy’s LNG-destined gas reserves in northeast British Columbia and in Pacific NorthWest’s proposed LNG export facility on Canada’s West Coast to China’s Sinopec.

As part of the transaction, Sinopec has also agreed to off-take 1.8 million tons of LNG per annum (MTPA), which represents a pro-rata 15 per cent of the LNG facility’s production, for a minimum period of 20 years, the Malaysian energy company said in a statement Tuesday.

In addition to the transaction, the Chinese company, through its affiliate, has also signed a binding Heads of Agreement with Petronas for the purchase of additional 3 MTPA of LNG for 20 years, sourced primarily from the Pacific NorthWest LNG project.

This additional volume of 3 MTPA, combined with the 1.8 MTPA of equity LNG off-take, makes Sinopec one of the largest LNG buyers from Petronas’ portfolio.

Recently, Petronas announced the 10 per cent equity participation in the project by Indian Oil Corporation Ltd. Last year the company sold 10 per cent and 3 per cent interests to Japex and PetroleumBRUNEI, respectively.

Following the completion of the acquisitions by Indian Oil Corporation Ltd and Sinopec, Petronas will hold a 62 per cent interest in the integrated project.