Malaysia’s state-owned energy company Petroliam Nasional Bhd (Petronas) took a wise step in canceling the US$29 billion Canada liquified natural gas (LNG) project and dispose of 10% in Petronas LNG 9 Sdn Bhd (PL9SB) to Thailand’s national company and partner.
Petronas and its partners took this move after a careful and total review of the Canada LNG project amid changes in market conditions.
Petronas’ Executive Vice President and CEO Upstream Mohd Anuar Taib said the oil firm is disappointed that that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry led to the decision.
“We along with our North Montney Joint Venture partners,remain committed to developing our significant natural gas assets in Canada and will continue to explore all options as part of our long-term investment strategy moving forward,” he said in a statement.
Anuar said Petronas’ commitment in Canada continues through Progress Energy Canada Ltd and its world-class inventory of natural gas resources where the subsidiary plays a key role in supporting its growth strategy in North America.
Petronas also sold 10% stake in Petronas LNG in Malaysia for US$500 million to Thai oil company JV partner, The Star reported, quoting PTT Exploration and Production Public Company Ltd (PTTEP).
PL9SB owns the ninth LNG liquefaction train and other related associated facilities located in the Petronas LNG complex in Bintulu, Sarawak with a production capacity of 3.6 million tonnes per annum of LNG. The commercial operations started on January 1, 2017.
The stake was acquired by PTTGL Investment Ltd (PTTGLI) – a company set up PTTEP’s subsidiary PTT Global LNG Company Ltd (PTTGL). PTTGL is a subsidiary of PTTEP, which is a 50:50 joint venture between PTTEP and PTT Public Company Limited.
PTTGLI has signed the share sale and purchase agreement with Petronas to acquire the 10% equity stake in Petronas LNG 9.
“The total consideration of the acquisition is approximately US$500mil of which PTTEP’s portion is approximately US$250mil,” it said. Expected closing date would be within September.
“With the entrance of PTTGLI, the share proportion in PL9SB shall stand at 80%, 10% and 10% owned respectively by Petronas, JXTG Nippon Oil & Energy Corporation (through its subsidiary, Nippon Oil Finance (Netherlands) B.V.) and PTTGLI.
PTTEP said the US$500mil acquisition cost will be funded by 40:60 debt and equity respectively.