KUALA LUMPUR (Sept 29): LNG Canada, a massive liquefied natural gas project backed by Malaysia’s PETRONAS, is expected to see an expansion costing RM86 billion, according to a news report.
The project’s partners are expected to announce that they have agreed to the expansion, The Globe and Mail reported citing people familiar with the situation. The plan is to double the plant’s capacity to as much as 30 million tonnes of liquefied natural gas a year, the Canadian newspaper said.
LNG Canada spokesperson Paul Hagel declined to comment to The Globe on whether the partners will announce the final investment decision on Tuesday. “Our joint venture partners continue to undertake their own assurance process for a potential phase 2 decision,” he was quoted as saying.
Shell owns the largest stake in LNG Canada at 40% followed by PETRONAS at 25%. PetroChina Co Ltd and Mitsubishi Corp each own 15% while Korea Gas Corp has the remaining 5% in the project that aims to supply the superchilled gas also known as LNG to Asia to meet the region’s rising demand.
A final investment decision in the oil-and-gas industry typically takes years and is a sign that a project will proceed following extensive studies and planning. The project owner then approves the budget, allowing contractors to acquire materials as well as equipment to begin work.
PETRONAS, formally known as Petroliam Nasional Bhd, last year 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 North Montney LNG Ltd Partnership that controls PETRONAS’ participation in LNG Canada.