Petronas to Invest $20 Billion in Canadian LNG Project to Supply Asia

Petronas, the Malaysian state-owned oil and gas company, is moving quite steadily into the liquefied natural gas (LNG) industry, with the latest news being that it plans to invest $20 billion in its west Canadian LNG project.

Petronas believes that LNG will be vital to meeting growing energy demand in Asia, and hopes that its Pacific NorthWest LNG project will secure a regular supply to the continent where it can then take advantage of the high demand and high prices.

Arif Mahmood, the vice president of corporate planning at Petronas, said the project will see the construction of two LNG trains, capable of transporting 6 million tonnes a year, to be completed by 2018 or 2019; and that $5 billion of the investment will be used to build a pipeline, built by TransCanada Corp., to supply gas to the LNG trains.

Mahmood even suggested that “there is space to build a third train and capacity could go up to 18 million tonnes a year,” if future expansion was required.

Related article: Canadian Company Strikes Deal for LNG Exports to Europe

Petronas was initially partnered with Progress Energy Resources Corp, but in a high-profile deal last year, managed to buy them and gain full ownership of the project. It is now looking for new partners that can also double up as LNG customers.

Its first LNG customer, Japan Petroleum Exploration Co., was secured after selling a 10 pecent stake in the project, and more potential customers are in talks with Petronas at the moment.

Mahmood explained that they’re actually looking for “potential partners where they will also be offtakers of the gas,” but also assured that Petronas intends to keep a 50% stake in the project at all times.

By. Charles Kennedy of Oilprice.com