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Energy giant looking to invest in B.C. natural gas

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The statement about the potential $5 billion dollar Canadian investment was made Friday, March 30, by Petronas chief executive officer Shamsul Abhar Abbas, saying "this is going to be big."

Abbas also stated in the interview that Petronas’ buyers of natural gas are looking for energy supplies within stable countries, which can be guaranteed for years.

This will not be the first time Petronas has invested in Canadian energy, as the company already has an agreement with Progress Energy, a Calgary-based gas company. The agreement allowed Petronas to acquire a 50 per cent interest in 60,000 hectares of Progress gas properties in B.C. for $1.07 billion.

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According to the Sun, the two companies are also planning a liquefied natural gas facility and export terminal, which will likely be in Kitimat. Under the agreement, Petronas would own 80 per cent while Progress would take the remaining 20 per cent of the proposed terminal.

Progress president Michael Culbert said his company is not in any discussion with Petronas beyond the previously announced joint venture, agreed upon by the two companies last June, However, Culbert did mention the LNG facility under discussion, saying a feasibility study is expected to be completed by August or September.

The Sun states that the facility will be a two-train facility, with a total capacity of 7.4 million tonnes per year and according to Culbert, a plant that size would require a gas supply of 560 million cubic feet per day. In order to finance it, the two companies would require proven reserves of nine trillion cubic feet, which would be enough gas to supply to plant for 20 years.

To put things into perspective, currently Progress has a total of 1.9 trillion cubic feet of reserves.

Culbert says that between now and 2014, Petronas and Progress intend to spend $2 billion developing gas assets in northeastern B.C. for the LNG plant.

For a look at the complete Vancouver Sun article, click here.

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