IOC to buy 10% stake in Petronas’ LNG export project in British Columbia

India's largest oil refiner Indian Oil Corp Ltd (IOC) has agreed to acquire Malaysian firm Petronas's 10 per cent equity stake in a shale-gas assets and liquefied- natural-gas (LNG) project in British Columbia, according to a stock market disclosure. Financial details of the deal are not disclosed.

Last month Petronas said it has agreed to sell a 25 per cent stake in its Canadian shale gas assets to an Indian company and an Asian gas buyer. It had not named the buyers but media reports had said the Indian firm is IOC.

IOC has entered into a transaction agreement with Progress Energy Canada Ltd, Pacific NorthWest LNG Ltd and Petroliam Nasional Berhad to acquire 10 per cent equity stake in Progress Energy's LNG-destined natural gas reserves and in the proposed PNW LNG export facility on Canada's West Coast, the disclosure said.

"As part of the transaction, IOC shall also off-take 1.2 million tonnes of liquefied natural gas (LNG) per annum, which represents 10 per cent of the LNG facility's production, for a minimum period of 20 years," IOC said.

Notably, Petronas, through its wholly-owned subsidiary Petronas International Corp, had acquired Progress Energy Resources Corp in a C$5.2 billion deal in 2011 to get the Altares, Lily and Kahta shale gas assets in north-eastern British Columbia.

Earlier in March last year, the company offloaded 10 per cent stake in the integrated shale gas development and LNG project to JAPEX Montney Ltd and another 3 per cent stake to Petroleum Brunei.

Presently, Progress Energy Canada is producing around 400 million cubic feet equivalent (cfe) of natural gas per day in North East British Colombia, which is currently supplying the Canadian market.

As on December 2013, the project had proven probable reserves (2P) of 8.35 trillion cfe (tcfe) and best case contingent resources of 24.7 tcfe. The total reserves and resource potential is in excess of 50 tcfe.

(Edited by Joby Puthuparampil Johnson)

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