KUALA LUMPUR (Oct 1): Petronas, formally known as Petroliam Nasional Bhd, has agreed to the entry of investment company MidOcean Energy into its two key project entities in Canada.
The deal will see MidOcean getting 20% in the North Montney Upstream Joint Venture that owns Petronas' upstream investments in Canada. MidOcean will also receive 20% in the North Montney LNG Ltd Partnership that controls Petronas’ participation in LNG Canada.
The value of the transaction was not disclosed in statements from MidOcean and Petronas. A Reuters report, citing unidentified people familiar with the situation, pegged the transaction value to “a little more than” US$3 billion (RM12.62 billion).
MidOcean Energy is a company backed by private equity firm EIG and oil major Saudi Aramco, investing in liquefied natural gas (LNG) projects. The company has signed 22 transactions worth US$9.4 billion over the last 23 years, according to its website.
Petronas said it remains committed to its investments in Canada and MidOcean’s entry would not affect its existing control over the two entities.
The partnership with MidOcean “underscores the strength and long-term potential of the North Montney assets”, Petronas said. “The strategic partnership with MidOcean paves the way for potential future collaboration, unlocking additional value through shared opportunities.”
LNG Canada, as the project is called, aims to supply LNG to Asia to meet the region’s rising demand at competitive prices.
For MidOcean, the stakes will allow the company to secure an associated LNG volume of about 700,000 metric tonnes per year and potentially more through the second phase of the project, according to a separate statement.
The transaction is anticipated to close in the fourth quarter of 2025, subject to customary regulatory approvals, MidOcean said.
Petronas held a 25% stake in LNG Canada that shipped the first cargo from its facility in June, alongside Shell plc (40%), PetroChina Co Ltd (15%), Mitsubishi Corp (15%) and Korea Gas Corp (5%).
When fully operational, the facility will have a capacity to export 14 million metric tonnes of LNG annually.
Lambert Energy Advisory is the financial adviser while Norton Rose Fulbright acted as legal adviser to Petronas. MidOcean, meanwhile, has RBC Capital Markets as its financial adviser and Latham & Watkins as legal adviser.