Petronas–Progress up LNG stakes in takeover proposal

Malaysian petroleum giant Petronas and its Canadian partner, Progress Energy Resources Corp. (TSX:PRQ), are upping the stakes in their bid to build a liquefied natural ...

Malaysian petroleum giant Petronas and its Canadian partner, Progress Energy Resources Corp. (TSX:PRQ), are upping the stakes in their bid to build a liquefied natural gas plant near Prince Rupert.

Progress yesterday confirmed that a joint-venture plan to build a two-train LNG plant in Prince Rupert is moving ahead, and has given the project a name: Pacific Northwest LNG. The two-train plant would be designed to produce 7.6 million tonnes of liquefied natural gas per year, at a cost of between $9 and $11 billion.

However, the company added that the initial output could be increased by 60% to 12 million tonnes annually if the Canadian government approves a $6 billion bid by Petronas to acquire Progress, which is the largest holder of gas properties in the Montney formation north of Fort St. John.

The bid was quashed in October with a federal government rejection. The companies have appealed the decision.

Meanwhile, Progress announced Tuesday that it is moving forward, regardless of what the federal government decides on the takeover proposal.

The companies have completed a feasibility study for an LNG export terminal on Lelu Island in the District of Port Edward near Prince Rupert and are now moving into what Progress calls a “pre-front-end engineering design” stage.

“We are excited to have completed the detailed feasibility study phase and are now moving into the next phase of our engineering work, which will include the submission of our project description to Canadian regulators in early 2013,” said Progress CEO Michael Culbert.

Petronas and Progress are still working on an investment plan, which it hopes to conclude in late 2014. It hopes to ship its first LNG exports in 2018.

Progress estimates the plant would create 3,500 direct jobs during construction and 200 to 300 permanent jobs.

nbennett@biv.com

@nbennett_biv

comments powered by Disqus

More from Mining & Energy

The private placement poison pill

Will Dolly Varden's use of a private placement to ward off hostile takeover become a new defence?

Read Article

BC Hydro facing $3.5 billion revenue shortfall

BC Hydro plans to rewrite contracts with power producers, still expects load demand from LNG

Read Article

Goldcorp posts loss, Teck posts profit

Goldcorp and Barrick both see shares dip, despite rising gold prices

Read Article

BC Hydro records ‘pretend profit’: NDP

NDP says BC Hydro deferral account for 2015-2016 is $1 billion higher than it should be

Read Article

Liquefied natural gas bridge to Hawaii collapses

Nixed long-term FortisBC LNG deal underscores growing competitiveness of renewables

Read Article

Subscribe to our mailing lists

* indicates required

Newsletters

* You can modify your newsletter subscriptions at the bottom of any newsletter you receive.
×