PETRONAS is buying a 25% stake in LNG Canada, after previously scrapping plans to develop its own project in Canada.
The LNG Canada joint venture aims to build a liquified natural gas facility in Kitimat, British Columbia, that would consist of two processing units known as “trains” capable of producing a combined 13m t/y of LNG. There will also be an option to expand to four units in the future. The joint venture participants already consist of Shell, Mitsubishi, PetroChina Canada, and Kogas Canada. Petronas announced that it would buy a 25% stake in the project with the purchase expected to close in the next few months. Shell will be the biggest owner in LNG Canada with a 40% stake.
The move comes as a surprise after Petronas’ decision in 2017 to cancel plans to develop the US$28bn Pacific North West LNG project near Port Edward in British Columbia. The project was cancelled due to the rising cost of the development and an overcapacity in the LNG market, however since then demand has increased from China, South Korea, and India.
“Petronas is in Canada for the long-term and we are exploring a number of business opportunities that will allow us to increase our production and accelerate the monetisation of our world-class resources in the North Montney,” said Wan Zulkiflee Wan Ariffin, CEO of Petronas and an IChemE Fellow. “LNG is just one of those opportunities.”