Petronas, Malaysia’s national oil and gas company, has acquired Calgary-based Progress Energy Resources Corp. (TSX:PRQ) for approximately $5.5 billion. The deal gives Petronas 100% control of Progress’ natural gas assets in northeast B.C., and it plans to build a liquefied natural gas (LNG) terminal near Prince Rupert.
The Progress acquisition is consistent with Petronas’ strategy of strengthening its position as one of the global leaders in LNG.
The transaction follows a joint venture established between the two companies last year to develop a portion of Progress’ Montney shale assets in the foothills of northeast B.C., and explore opportunities to develop LNG export capacity on B.C.’s west coast.
The company’s Canadian operations are to remain based in Calgary. It will have a commercial office in Vancouver for LNG.
Datuk Anuar Ahmad, executive vice-president of the gas and power business for Petronas, said, “The proposed transaction will combine Petronas’ significant global expertise and leadership in developing LNG infrastructure with Progress’ extensive experience in unconventional resource development to build a strong and growing world class energy business based in Canada.”
Ahmad added the joint venture has selected a site in Prince Rupert for its planned LNG export facility and a feasibility assessment agreement has been signed with the Prince Rupert Port Authority giving the project the exclusive right to conduct further feasibility and investigative studies on Lelu Island.
Following a successful transaction, Petronas plans to combine its Canadian business with that of Progress and intends to retain all the employees of Progress.
