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Indian Oil to buy stake in Petronas' LNG project for $900 mn : Business Today

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Indian Oil to buy stake in Petronas' LNG

project for $900 mn
PTI

March 7, 2014

Indian Oil Corp (IOC) , the nation's largest oil firm , on Friday signed a deal to buy a 10 per
cent stake in shale-gas assets and a linked liquefied natural gas (LNG) project in British
Columbia for $900 million.
The acquisition of stake in Progress Energy Resources Corp's shale gas assets and Pacific
NorthWest LNG for 1 billion Canadian dollars ($900 million) marks Indian Oil Corp 's
maiden entry into North America.
Announcing the deal, Petroliam Nasional Bhd, Malaysia's state oil company, said it has
signed transaction agreements to sell 10 per cent interest in Progress Energy's LNGdestined natural gas reserves in northeast British Columbia and in the proposed LNG export
facility on Canada's West Coast.
"As part of the transaction, IOC has also agreed to offtake 1.2 million tons of liquefied natural
gas (LNG) per annum, which represents 10 per cent of the LNG facility's production, for a
minimum period of 20 years," Petronas said in a statement.
The Malaysian firm, through its wholly-owned subsidiary Petronas International Corp, had in
2011 bought Canada's Progress Energy Resources Corp in a 5.2 billion Canadian dollars
deal to get the Altares, Lily and Kahta shale gas assets in north-eastern British Columbia.
In March 2013, it sold a 10 per cent stake in the integrated shale gas development and LNG
project to Japan Petroleum Exploration Co (Japex) and another 3 per cent to Petroleum
Brunei.
After the transaction with IOC, Petronas will hold 77 per cent of the integrated project, the
statement said.
The Canadian asset will produce as much as 19.68 million tonnes of LNG a year for 25 years
starting in 2018.
Progress Energy has more than 1.9 trillion cubic feet of proved and probable gas reserves in
British Columbia.
The Malaysian firm is planning to build a liquefied natural gas terminal off Canada's Pacific
Coast, aimed at exporting natural gas to Asian markets.
IOC, which had previously ventured into overseas oil and gas exploration and production with
state-owned explorer OIL India Ltd, went for the Petronas deal on its own.
Company officials said IOC has lined up a $900 million one-year bridge loan from a group of
banks to fund the purchase of a stake in Petronas's Canadian gas projects.
Progress Energy, a leader in Canadian natural gas development, produces more than 400
million cubic feet equivalent of natural gas per day in northeast British Columbia and
northwest Alberta.
It is wholly owned by Petronas, a global leader in LNG and the majority owner of Vancouverbusinesstoday.intoday.in/storyprint/204068

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