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Sinopec, Huadian to Buy 15% Stake in Petronas’s Canadian Project

April 30 (Bloomberg) -- China Petrochemical Corp., Asia’s biggest refiner, and China Huadian Corp. agreed to buy a 15 percent stake in Petroliam Nasional Bhd.’s proposed liquefied natural gas facility in Canada for an undisclosed amount.

China Petrochemical, known as Sinopec Group, will own 10 percent and China Huadian, a state-owned power generator, will have a 5 percent stake, the former said in an e-mailed statement today. Sinopec Group will buy 1.2 million metric tons of LNG annually from the project and China Huadian 600,000 tons.

Sinopec Group announced it will buy a 15 percent stake in the project yesterday without mentioning a Chinese partner. The acquisition gives the Chinese oil company access to at least 8.35 trillion cubic feet of gas reserves from British Columbia’s fields controlled by Progress Energy Canada Ltd. Malaysia-owned Petronas, which acquired Progress Energy in 2012, will hold 62 percent of the integrated project after the sale.

Petronas has previously announced stake sales in the proposed terminal to Indian Oil Corp., Brunei National Petroleum Co. and Japan Petroleum Exploration Co.

The LNG export project on Canada’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 tons of LNG a year for 25 years starting in 2018, according to an application to Canada’s National Energy Board.

Sinopec Group, the parent of listed China Petroleum & Chemical Corp., will separately buy 3 million tons of LNG a year for 20 years from Petronas, according to a statement yesterday.

To contact the reporters on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net; Winnie Zhu in Singapore at wzhu4@bloomberg.net

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Abhay Singh, Keith Gosman

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