Progress Energy, Petronas LNG export facility enters design phase

Tue Dec 4, 2012 11:07am EST
 

(Reuters) - Progress Energy Resources Corp PRQ.TO, whose $5.2 billion takeover by Malaysia's Petronas PETR.UL is being reviewed by the Canadian government, said its LNG export facility on the country's Pacific coast is moving into the design phase.

The venture, Pacific Northwest LNG, in which Petronas is a partner, has the capacity to export about 3.8 million tonnes of natural gas a year per plant, Progress said.

Export capacity will increase by 60 percent to 6 million tonnes per plant a year if the Petronas deal is approved, Progress said.

Petronas in November submitted a modified offer after the federal government blocked an earlier bid.

Progress will submit a project description to Canadian regulators early next year as part of the design phase.

The LNG export facility at Lelu Island in British Columbia, if approved, would require an investment of between C$9 billion and C$11 billion, and a final decision on the investment will be made in early 2014, Progress said.

The project will include two trains, or liquefaction plants, with the first LNG exports expected in 2018.

Canada is looking to tap Asian markets for its energy exports as oil output expands in its biggest market, the United States. Companies such as Apache Corp (APA.N: Quote), Royal Dutch Shell Plc (RDSa.L: Quote), BG Group Plc (BG.L: Quote) are planning LNG projects, which would help ship gas from the rich shale fields of northeastern British Columbia to Asian buyers.

Shares of Progress fell 14 Canadian cents to C$20.24 on the Toronto Stock Exchange on Tuesday.

(Reporting by Krithika Krishnamurthy in Bangalore; Editing by Sriraj Kalluvila)