Affiliates of China Petrochemical Corp. (Sinopec) are acquiring a 15% interest in Progress Energy Canada Ltd.’s gas reserves in northeast British Columbia (BC) and in the proposed Pacific NorthWest LNG Ltd. (PNW LNG) export terminal on Canada’s West Coast.
As part of the deal, Sinopec has agreed to offtake 1.8 million tonnes per annum (mtpa) of LNG — a pro-rata 15% share of the facility’s production — for a period of 20 years, according to Progress, PNW LNG and Petroliam Nasional Berhad (Petronas).
Through affiliates Sinopec has also signed a binding heads of agreement with Petronas for the purchase of 3 mtpa of LNG for 20 years sourced primarily from the PNW LNG project. The 3 mtpa sale and purchase is in addition to the 1.8 mtpa of equity LNG offtake, making Sinopec one of the largest LNG buyers from the Petronas portfolio. The deal is subject to approval by the Chinese authority.
The transaction builds upon the two deals done in 2013 that saw Japex Montney Ltd. acquire a 10% interest (see Daily GPI, March 5, 2013), PetroleumBrunei acquire a 3% interest in the project and the recent announcement of the acquisition of a 10% interest by Indian Oil Corp. Ltd. (see Daily GPI, March 7, 2014). Following the closing of the Indian Oil and Sinopec acquisitions, Petronas will hold 62% of the integrated project and will continue to work with potential customers and partners to secure markets for LNG.
Sinopec is the fourth partner in the consortium of LNG buyers that Petronas is bringing to the LNG export project. Each of the partners will offtake a volume of LNG pro-rata to their upstream and downstream equity interest in the project.
“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 Progress Energy CEO Michael Culbert.
The PNW LNG facility is planned to be constructed at Lelu Island near Prince Rupert, BC. It is to initially have two LNG trains of about 6 mtpa capacity each. A third 6 mtpa train is planned for later. The facility would liquefy and export gas produced by Progress Energy Canada in northeastern BC.
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |