Japex to buy stake in Canada LNG, shale gas project from Petronas

Japan Petroleum Exploration Co. (Japex) agreed to join the proposed British Columbia Pacific Northwest LNG venture and to buy a stake in the North Montney shale gas project from Malaysia’s Petronas.

The price that Japex plans to pay was not disclosed. British Columbia Pacific Northwest is among a number of proposed LNG export terminals in the US and Canada.

Petronas acquired the Pacific Northwest LNG export terminal project last year when Petronas bought Progress Energy Resources Corp. for $5.4 billion (OGJ Online, June 28, 2012).

Petronas plans to make a final investment decision on the LNG project by Dec. 31, 2014. Commercial operations could start by the end of 2018. Japex said it plans to receive 1.2 million tonnes/year of LNG from the project, providing that both the transaction and the project are finalized.

Japex announced it signed a heads of agreement with Petronas. Terms call for Japex to acquire a 10% interest of the natural gas blocks in North Montney, BC, through new Canadian subsidiary Japex Montney Ltd., and also 10% interest of Pacific Northwest LNG project on Lelu Island off the Hecate Strait in the District of Port Edward, BC.

Petronas Carigali Canada Ltd. and Progress Energy Resources Corp., Calgary, owners of Pacific Northwest LNG, said last year they have moved the project to pre-FEED following a successful feasibility study. Plans call for the plant to initially include two, 3.8-million tonne/year trains with expansion capability for a third (OGJ Online, Dec. 5, 2012).