Wednesday, 30 April 2014

Sinopec inks purchase pacts with Petronas' Canadian subsidiaries

Petroliam Nasional Bhd (Petronas) has secured China Petrochemical Corp (Sinopec) (pic) as the latest buyer for its Canadian-based Pacific Northwest Liquified Natural Gas (LNG) project.

The national oil company said in a statement yesterday that its subsidiaries, Progress Energy Canada Ltd and Pacific NorthWest LNG Ltd, had signed transaction agreements with Sinopec.

The deal will see the Chinese company’s affiliates acquiring a 15% interest in Progress Energy’s LNG destined gas reserves in northeast British Columbia and in Pacific NorthWest’s proposed LNG export facility on Canada’s West Coast.

“As part of the transaction, Sinopec has also agreed to off-take 1.8 million tonnes of LNG per annum (MTPA), which represents a pro-rata 15% of the LNG facility’s production, for a minimum period of 20 years,” said Petronas in a statement yesterday.

In addition to the transaction, Petronas said Sinopec, through its affiliate, had also signed a binding heads of agreement with the national oil company for the purchase of additional three MTPA of LNG for 20 years, sourced primarily from the Pacific NorthWest LNG project.

“This additional volume of three MTPA, combined with the 1.8 MTPA of equity LNG off-take, makes Sinopec one of the largest LNG buyers from Petronas’ portfolio.”

This transaction with Sinopec follows the two previously-announced transactions in 2013 that saw Japex Montney Ltd and PetroleumBrunei acquire 10% and 3% interests respectively in the project.

Recently, Petronas announced the 10% equity participation in the project by Indian Oil Corp Ltd.

Following the completion of the acquisitions by Indian Oil Corp and Sinopec, Petronas will hold a 62% interest in the integrated project and will continue to work with potential customers and partners to secure markets for LNG.