Shale Daily / NGI All News Access

Petronas, Indian Oil Said to Be in Montney Shale Talks

Malaysia national oil and gas company Petronas (Petroliam Nasional Berhad) is in negotiations to sell a 10% stake in Canadian shale properties it acquired last year to the state-owned Indian Oil Corp. Ltd. (IOC).

According to reports, a deal between Petronas and IOC for assets in the Montney Shale could be valued at $1.5 billion.

Last year, Petronas acquired Calgary-based Progress Energy Resources Corp. for C$5.5 billion (see Shale Daily, Aug. 1, 2012; June 29, 2012). The company planned to use its worldwide expertise in liquefied natural gas (LNG) to bring Canadian natural gas to market.

News of a potential transaction between Petronas and IOC appeared similar to a deal announced in March between Japan Petroleum Exploration Co. Ltd. (Japex) and Petronas (see Daily GPI, March 5). Under that deal, which closed in April, Japex acquired a 10% stake in natural gas blocks in North Montney, British Columbia (BC), and it formed Canadian subsidiary, Japex Montney Ltd.

Progress' relationship with Petronas started in 2011, when the two companies formed a joint venture (JV) in the Montney Shale (see Shale Daily, June 3, 2011). The JV gave Petronas a 50% stake in Progress' Atares, Lily and Kahta properties, shale gas assets located in northeastern BC.

Petronas and Progress have also formed Pacific Northwest LNG, a partnership to build an LNG export facility on BC's Lelu Island. The Petronas-Japex deal gave the latter a 10% interest in Pacific Northwest LNG, with Japex also committing to take 1.2 million metric tons a year (mmty) from the project, or 10% of its estimated production of 12 mmty.

Comments powered by Disqus