Indian Oil Buys 10% Stake in Petronas' Canadian LNG Project

Indian Oil Corporation (IOC) through its wholly owned affiliate IndOil Montney Ltd, Canada has signed a deal with Progress Energy for the acquisition of a 10 percent interest in Progress Energy Canada’s shale gas assets in northeast British Columbia and in the proposed Pacific NorthWest LNG project.

Progress Energy is wholly owned by Petronas of Malaysia.

As part of the transaction, IOC shall also offtake 1.2 million tons of liquefied natural gas (LNG) per annum (MMTPA), which represents 10 percent of the LNG facility’s production, for a minimum period of 20 years, the Indian state owned firm said in a statement Friday. 

Last year, Japex acquired 10 percent and Petroleum Brunei bought three percent stake in the project. Following the closing of the IOC acquisition, the Malaysian firm will hold 77 percent of the integrated project.

The project holds 2P reserves at year end of 2013 of 8.35 Tcfe and best case contingent resources of 24.7 Tcfe. The total reserves and resource potential is in excess of 50 Tcfe in which, IOC share will be over 5 Tcfe. Progress Energy Canada is currently producing approximately 400 million cubic feet equivalent of natural gas per day.

Pacific NorthWest LNG is planning to build a LNG export facility on Canada’s West Coast at Lelu Island near Prince Rupert, British Columbia. The proposed facility will comprise an initial development of two LNG trains of approximately 6 million tonnes per annum (MTPA) each and a subsequent development of a third train of approximately 6 MTPA.

The acquisition of this interest in PNW LNG integrated project gives IOC the opportunity to be part of a world class large-scale resource play and greenfield LNG development in a stable Canadian regime, providing IOC access to significant upstream gas resources and securing LNG volumes for our domestic market, Indian Oil said.

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