Malaysia's national oil company is investing $1.07 billion to gain access to shale gas assets in northeastern B.C.
Progress Energy Resources Corp. (TSX: PRQ) announced Thursday it has struck an agreement with Petronas to develop a portion of Progress’ Montney shale assets in the foothills of northeastern B.C.
The two companies are also forming a joint venture to build a liquid natural gas facility on B.C.’ west coast to export the gas.
Under the agreement, Progress, headquartered in Calgary, will sell 50% of its working interest in its Altares, Lily and Kahta properties to Petronas for $1.07 billion. The investment gives Progress the capital it needs to accelerate the development of its shale gas assets, the company said.
“This is a breakthrough transaction for Progress," said Progress president and CEO Michael Culbert. "The partnership we are launching will enable us to accelerate our growth strategy.
“As well as enhancing Progress shareholder value, this partnership will also generate substantial economic benefits for local communities and the province of British Columbia, while leveraging the environmental benefits of Canada’s abundant and clean-burning natural gas resources globally.”
Petronas and Progress will establish an LNG export joint venture to build a new liquid natural gas export facility somewhere on the B.C. coast. Petronas would operate the facility, and the companies would jointly market the gas globally.
“Canada is poised to take a larger role on the world’s energy stage," Culbert said. "Developing new export options for Canadian natural gas producers is a logical step in connecting our vast resources with growing Asian demand for environmentally responsible energy sources like natural gas.
“We look forward to working with west coast British Columbia communities as we pursue this opportunity to build a new facility that will add value to British Columbia’s natural resources while creating considerable long-term local economic benefits.”
Petronas owns natural gas interests in Australia, Egypt and the UK. Progress Energy’s stocks were selling at $14.70 Friday afternoon.
Nelson Bennett
Twitter: nbennett_biv