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Indian Oil Corp. Plans 10% Stake in Pacific NorthWest LNG Project

An Asian-owned proposal reached out to India for a new junior partner in its spot in the 10-project lineup to build liquefied natural gas (LNG) export terminals on the Pacific Coast of British Columbia (BC).

Progress Energy, the Canadian arm of Malaysian state energy conglomerate Petroliam Nasional Berhad (Petronas), announced the recruitment of Indian Oil Corp. to take a 10% interest in its Pacific NorthWest LNG scheme.

The deal includes 10% of Petronas-Progress shale gas properties in northern BC, a commitment to buy 10% of exports through the terminal, and a matching one-tenth ownership of the west coast facility. No price was disclosed for the transaction.

Petronas-Progress previously sold a 10% share in its BC development program to Japan's JAPEX exploration and development group and a 3% interest to Petroleum Brunei (see Daily GPI, March 5, 2013). Still holding a 77% majority interest, Petronas-Progress said it "will continue to work with potential customers and partners to secure markets for LNG."

Progress President Michael Culbert said of the deal, "Each of these major investments in British Columbia underscores the globally attractive and competitive opportunities for Canadian natural gas in the Pacific Rim." Pacific NorthWest LNG President Greg Kist added, "Our growing partner list adds momentum."

The project's schedule calls for a decision by the end of this year on whether to advance to construction, and commencement of tanker sailings to Asia in 2018 if the plant is built promptly. The Petronas-Progress group holds a license from the National Energy Board to export 24.5 Tcf of gas at a rate of up to 2.7 Bcf/d, depending upon the final size that the terminal reaches by being built in stages scaled to match market conditions.

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