KUALA LUMPUR, April 29 – Petronas unit, Progress Energy Canada Ltd and Pacific Northwest LNG have signed transaction agreements with China Petrochemical Corporation (SINOPEC) for the Canadian LNG project. In a statement here Tuesday, Petronas said SINOPEC is now the fourth partner in a consortium of LNG buyers which PETRONAS is bringing to the British Columbia LNG export project. Petronas said Progress Energy and Pacific Northwest had signed agreements where SINOPEC, through its affiliates, will acquire a 15 per cent interest in Progress Energy’s LNGdestined gas reserves in northeast British Columbia and in Pacific NorthWest’s proposed LNG export facility on Canada’s West Coast.
As part of the deal, SINOPEC has also agreed to off-take 1.8 million tons of LNG per annum (MTPA), which represents a pro-rata 15 per cent of the LNG facility’s production, for a minimum period of 20 years. In addition to the transaction, SINOPEC, through its affiliate, has also signed a binding Heads of Agreement with PETRONAS for the purchase of additional 3 MTPA of LNG for 20 years, sourced primarily from the Pacific Northwest LNG project. Petronas’ statement said the additional volume of 3 MTPA, combined with the 1.8 MTPA of equity LNG off-take, makes SINOPEC one of the largest LNG buyers from PETRONAS’ portfolio.
It said the transaction with SINOPEC follows the two previously announced transactions in 2013 that saw JAPEX Montney Ltd and PetroleumBRUNEI acquire 10 per cent and 3 per cent interests respectively in the project. Recently, PETRONAS announced the 10 per cent equity participation in the project by Indian Oil Corporation Ltd. Following the completion of the acquisitions by Indian Oil Corporation Ltd and SINOPEC, PETRONAS will hold a 62 per cent interest in the integrated project and will continue to work with potential customers and partners to secure markets for LNG. According to the statement, each of the partners will off-take a volume of LNG prorates to their upstream and downstream equity interest in the project.