Progress Energy Canada Ltd., Pacific NorthWest LNG Ltd. and Petronas have signed transaction agreements whereby PetroleumBrunei, through its affiliates, will acquire a 3% interest in Progress Energy Canada's natural gas assets in northeast British Columbia and in the proposed Pacific Northwest LNG export facility.
As part of the transaction, PetroleumBrunei has agreed to buy a 3% share of the LNG facility's production for a minimum period of 20 years.
"[This is] yet another traditional Asian supplier looking to diversify its sources of supply," said Chris Theal, president and chief executive officer of Kootenay Capital Management. "I think Petronas will continue to sell equity interests in the project down to 50% and be very focused on bringing in more partners that are Asian customers. It gives the project much more solid footing having partners that are committed to offtake.
"In our view, this increases the probability of commerciality and certainly continues to position them as first in the queue towards a project," he added. "The B.C. LNG fiscal regime and pipeline right-of-ways will ultimately be the driver of any FID [final investment decision]. Still, we think these commercial partnerships will continue and expect Sinopec to buy 33% of [Apache Corporation's] 50% working interest in Kitimat LNG and the upstream assets in the Liard/Horn River Basin."
Greg Kist, president of Pacific Northwest LNG, said, "We are pleased to welcome PetroleumBrunei as another important partner in our proposed LNG facility.
"British Columbia's abundance of natural gas, strategic location and proximity to Asian markets makes our LNG project attractive for international investment."
