China Petrochemical Corp. agreed to buy a 15 percent stake in gas reserves and a proposed liquefied natural gas facility in British Columbia from Petroliam Nasional Bhd. for an undisclosed amount.
Sinopec, as the Chinese company is known, will get 1.8 million tons of LNG annually for 20 years, about 15 percent of the terminal’s output, Petronas said in a statement today. Sinopec also agreed to buy 3 million tons a year of LNG for 20 years from Petronas, making it one of the Malaysian state-owned company’s largest buyers of the fuel.
Petronas, which acquired Progress Energy Canada Ltd. in 2012, will hold 62 percent of the integrated project after the sale. The company has previously announced the sale of stakes in the terminal to Indian Oil Corp., Brunei National Petroleum Co. and Japan Petroleum Exploration Co.
The acquisition gives the Chinese oil company access to at least 8.35 trillion cubic feet of gas reserves in British Columbia fields controlled by Progress Energy Canada. The Kuala Lumpur-based company aims to reduce its share in Pacific NorthWest LNG, which runs the gas-export facility, to as low as 50 percent by selling stakes to Asian gas buyers, the unit’s President Greg Kist said in November.
The LNG export project on Canadia’s west coast, with an estimated price tag of C$9 billion ($8.2 billion) to C$11 billion, will produce as much as 19.68 million metric tons of LNG a year for 25 years starting in 2018, according to an application to Canada’s National Energy Board.