PETRONAS' move could open Asia market for Canadian natgas - exec

03 June 2011 18:28  [Source: ICIS news]

TORONTO (ICIS)--The move by Malaysia energy and petrochemicals major PETRONAS to invest in Canada’s shale gas could open up Canadian gas to markets in Asia, an industry executive said on Friday.

PETRONAS plans to invest Canadian dollar (C$) 1.07bn ($1.10bn, €761m) to develop shale gas assets in Canada's western British Columbia province, and is also considering a liquefied natural gas (LNG) export plant there, it said this week.

“This [plan] would expand the marketing presence of Canadian gas, and obviously Asia is a big part of the future global natural gas demand,” said Michael Culbert, CEO of Progress Energy Resources, PETRONAS’ Canadian project partner.

The US has been Canada’s only export market for natural gas.

Culbert, who was briefing Canadian business television, said the LNG plant could have an export capacity of as much as 1bn cubic feet/day of gas.

Under a strategic agreement signed this week, PETRONAS would be the operator of the LNG project, holding an 80% stake, with Progress holding the remaining 20%, he said.

Culbert said he is confident PETRONAS and Progress will get Canadian government approval for the deal.

“We don’t see why [the regulatory process] would be any hold-up,” he said.

Last year, Canada blocked a high-profile bid by Anglo-Australian miner BHP Billiton for Canada’s fertilizer major PotashCorp - marking only the second time the government blocked a deal since 1985, when the relevant foreign investment legislation came into force. 

Culbert also said Progress has experience in “fracking” - a hydraulic fracturing process used in drilling for shale gas - and is operating in a “responsible manner.”

Earlier this week, opposition politicians in Quebec called for a moratorium on fracking in the province, following reports that the process may have triggered a small earthquake at a project in the UK.

In France, the lower house of parliament has voted to ban fracking.

PETRONAS' investment follows similar recent deals for Canadian oil and gas resources by PetroChina, Sinopec, Sasol and others.

($1 = C$0.97) ($1 = €0.69)

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By: Stefan Baumgarten
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