Petronas sees $20 billion investment in its Canadian LNG project

Tue Jun 11, 2013 4:19am EDT
 
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KUALA LUMPUR (Reuters) - Malaysian state oil and gas firm Petronas expects investment of $20 billion in its west Canada liquefied natural gas (LNG) export project that aims to meet growing demand in Asia, a senior company official said on Tuesday.

The project, known as Pacific NorthWest LNG, will build two LNG trains of 6 million tons per year (tpy) each by the end of 2018 or 2019, Arif Mahmood, vice president of corporate planning at Petronas told an industry conference.

The $20 billion investment cost includes about $5 billion for a pipeline project to be built by TransCanada Corp TRP.TO to supply gas to the two LNG trains, Mahmood said.

"There is space to build a third train and capacity could go up to 18 million tpy," he said, referring to potential expansion at the site.

Petronas bought its joint venture partner Progress Energy Resources Corp last year in a high-profile deal that had been initially blocked by the Canadian government.

The Malaysian company secured its first LNG buyer for the project after selling a 10 percent stake to Japan Petroleum Exploration Co 1662.T.

Petronas is in talks with more buyers to sell stakes in the project.

"What we're looking for is actually potential partners where they will also be offtakers of the gas," Mahmood said, adding that Petronas will own at least 50 percent of the project.

In Malaysia, Petronas plans to make a final investment decision on its second floating LNG project later this year, he said. The 1.5 million tpy FLNG project will be at the Rotan Field in deepwater Block H offshore Sabah and could start production in 2016, he said.

The company's first 1.2 mtpy FLNG project at Kanowit field, 180km offshore Bintulu, is expected to be completed in 2015.

(Reporting by Florence Tan; Editing By Tom Hogue and Muralikumar Anantharaman)

 
The Petronas logo is seen at one of its petrol outlets in Putrajaya outside Kuala Lumpur December 8, 2012. REUTERS/Bazuki Muhammad