One of the liquefied natural gas proposals closest to Prince George has received a major cash infusion and new investment interest.
The Petronas project seeks to build a pipeline from the existing Hudson's Hope gas fields to a proposed processing plant at the Port of Prince Rupert.
Petronas is the giant petroleum company owned by the government of Malaysia. It is considered one of the top 50 richest companies in the world by Fortune Magazine.
In 2011 and 2012, Petronas became a partner and then the primary owner of Progress Energy Canada Ltd. (PECL), the Canadian company with the largest single extraction tenure at the massive Montney natural gas basin in the B.C. northeast.
PECL has about 900,000 acres there on which to drill, and already produces about 350 million cubic feet of natural gas per day ,which is sold to Canadian customers.
When Petronas bought PECL, two smaller partners were part of the deal: three per cent owners Petroleum Brunei, and 10 per cent owners Japan Petroleum Exploration.
This week, that family of minority owners grew, giving Petronas more cash to use in their ultimate plans for northern B.C.
"I am pleased to announce that we have just finalized a further 25 percent equity participation from an Indian party and an established Asian LNG buyer," said Shamsul Azhar Abbas, president and CEO of Petronas. He was speaking Tuesday at an LNG conference in Asia. The Asian buyer of the natural gas was not disclosed, nor was the India-based investor, although sources in Asia indicated India's state-run petroleum company Indian Oil Corp. had been positioning itself recently to make a major purchase of shares in Canada.
Petronas is still advancing its hopes to build the pipeline and the shipping facility. It has secured land on Lelu Island and an operating agreement with the Prince Rupert Port Authority for the proposed LNG terminal. Should it go ahead, this would be a construction investment estimated at between $9 billion and $11 billion. The company said they anticipated the construction phase of the Prince Rupert facility would sustain about 3,500 jobs at the peak of construction, plus provide 200 to 300 additional jobs to operate the plant, which would be owned and operated by a Petronas subsidiary company called Pacific NorthWest LNG.
The shipping facility is subject to provincial and federal environmental assessment. Preliminary project descriptions have been filed and initial consultations are underway. The company said it plans to file the first formal application sometime in early 2014.
Also needed for the project to succeed is the pipeline. At the 2013 edition of the annual B.C. Natural Resources Conference in Prince George, Petronas announced a $6 billion deal with TransCanada Pipelines to build and operate this pipeline, should it pass all regulatory hurdles. It, too, is subject to a full federal/provincial environmental assessment process of its own, and it, too, has estimated the formal application to be submitted in the first quarter of 2014.
In aid of that process, TransCanada Pipelines is holding a series of public consultation meetings across the region in the coming weeks. On March 18 they will be in Fort St. John event, March 19 in Chetwynd and March 20 in Mackenzie. All are hosted by the Chambers of Commerce in those communities.
The proposed pipeline would start at Hudson's Hope, dip southward to a Williston Lake crossing point just north of Mackenzie, head west to almost Babine Lake where it will again turn north and continue on past the Hazeltons. At Cranberry Junction, about 60 kilometres north of Highway 16 on Highway 37, it will hook southwest to Lelu Island. The terrain in that region is so complex that a number of route options are being considered.
Petronas may not be finished raising cash for the B.C. suite of proposals. Previous company statements indicated they would be willing to sell up to 50 per cent of the PECL part of the equation and on Tuesday's announcement Abbas said, "We are in advanced talks with other buyers for the remaining 12 percent."
- with files from Reuters News Service
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