Progress Energy Canada and Pacific NorthWest LNG welcome third partner to British Columbia LNG export project
Growing Asian investment fuels momentum for Canadian-led LNG export sector
CALGARY, March 7, 2014 /CNW/ - Progress Energy Canada Ltd. (Progress Energy), Pacific NorthWest LNG Ltd. (PNW LNG) and Petroliam Nasional Berhad (PETRONAS) have signed transaction agreements whereby Indian Oil Corporation Ltd., through its affiliates, will acquire a 10 percent interest in Progress Energy's LNG-destined natural gas reserves in northeast British Columbia and in the proposed PNW LNG export facility on Canada's West Coast. As part of the transaction, Indian Oil Corporation Ltd. has also agreed to offtake 1.2 million tons of liquefied natural gas (LNG) per annum, which represents 10 percent of the LNG facility's production, for a minimum period of 20 years.
This transaction builds upon the two previously announced transactions in 2013 that saw JAPEX Montney Ltd. acquire 10 percent and PetroleumBRUNEI acquire 3 percent. Following the closing of the Indian Oil Corporation Ltd. acquisition, PETRONAS will hold 77 percent of the integrated project and will continue to work with potential customers and partners to secure markets for LNG.
"Each of these major investments in British Columbia underscores the globally attractive and competitive opportunities for Canadian natural gas in the Pacific Rim," said Michael Culbert, President & CEO of Progress Energy, of Calgary.
"We are assembling an industry-leading project and our growing partner list adds momentum to building an exciting new energy export sector for Canada," added Greg Kist, President of Pacific NorthWest LNG, of Vancouver.
Progress Energy Canada - building a world-class inventory of natural gas resources
Over the past year, Progress Energy and its North Montney Joint Venture (NMJV) partners have more than tripled their natural gas reserves to support LNG exports from northeast British Columbia. An independent 2013 year-end evaluation has estimated the NMJV total proven and probable reserve (2P) additions in 2013 to be 0.96 billion barrels of oil equivalent (BOE) or 5.76 trillion cubic feet of equivalent natural gas (Tcfe), a 211 percent increase from the 2012 year-end balance of 0.45 billion BOE or 2.68 Tcfe. This results in total 2P reserves at year-end 2013 of 1.39 billion BOE or 8.35 Tcfe. In addition, a contingent resource assessment was also completed resulting in a best case contingent resource of 24.7 Tcf with approximately 65 percent of the NMJV land delineated to date.
"This is tremendous accomplishment. In one short year, delineation drilling has established more than half of the 15 Tcf of proven and probable reserves inventory that we plan to have confirmed in order to supply the first 20 years of LNG exports from Pacific NorthWest LNG," Culbert said
As the most active driller in British Columbia, Progress plans to continue with its ambitious capital investment in 2014, operating an average of 25 rigs to drill an estimated 170 wells. This activity level and investment has resulted in an estimated 2,500 to 3,000 direct and indirect jobs supporting an LNG export sector in British Columbia.
"Our employees and contractors executed a very safe and effective program that marked important milestones in 2013. We are on track to substantiate the natural gas reserves that will support developing our planned multi-billion dollar, long-term development exporting LNG to Asian customers. As we strive to build the natural gas resource base necessary to supply the proposed PNW LNG project, we will work tirelessly to ensure safe and environmentally sound operations at every step," Culbert said.
Pacific NorthWest LNG - securing regulatory approvals in 2014
The development of PNW LNG's facility is progressing steadily with plans to reach a final investment decision by the end of 2014 and targeting first LNG exports in late 2018. The competitive front-end engineering and design (FEED) phase, involving three major engineering and construction consortia, is well advanced and PNW LNG is targeting the third quarter of 2014 for the receipt and evaluation of the engineering, procurement, construction and commissioning (EPCC) bids. The design is for two trains of approximately 6 million tonnes per annum each with the option for a third train of the same size.
This year, the LNG facility planned near Prince Rupert, B.C. will undergo a thorough environmental review by the Canadian Environmental Assessment Agency and the B.C. Environmental Assessment Office. This review includes ongoing consultation with stakeholders and First Nations. PNW LNG has held numerous open houses where local residents and affected stakeholders have had the opportunity to learn about the LNG project benefits and voice concerns.
"We are pleased to have received our export license from Canada's National Energy Board in December 2013 and we continue to work to complete a robust environmental review," Kist said. "With a new office in Vancouver and the December opening of our community office in Prince Rupert, we are hiring staff and keeping our communities informed with project updates as our plans unfold."
Prince Rupert Gas Transmission - pipeline infrastructure advances
To connect the partners' natural gas reserves in northeast British Columbia with the LNG plant on the West Coast, TransCanada Corporation is advancing plans to build two pipelines - the North Montney Mainline project into the natural gas fields as well as the Prince Rupert Gas Transmission (PRGT) pipeline to the coast. The 305-kilometre North Montney Mainline application has been made to the NEB. This regional pipeline would run from the Groundbirch area, about 35 kilometers southwest of Fort St. John, B.C., north to gather natural gas through the NMJV operations along the Alaska Highway. PRGT would then transport the natural gas to the Prince Rupert area along a 900-kilometer route that is under consideration and selection with input from First Nations and community stakeholders.
About Progress Energy Canada
Progress Energy Canada, a leader in Canadian natural gas development, is building upon its history of performance excellence in North America to pioneer new infrastructure for delivering LNG to Pacific Rim markets. Producing more than 400 million cubic feet equivalent of natural gas per day in northeast British Columbia and northwest Alberta, Progress Energy is serving Canadian markets and ambitiously expanding productive capacity on its extensive Montney land holdings in preparation for the opening of new LNG markets in Asia. Progress Energy is wholly owned by PETRONAS of Malaysia, a global leader in LNG and the majority owner of Vancouver-based Pacific NorthWest LNG Ltd. Progress and Pacific NorthWest LNG are helping craft a bright new future for Canada's energy exports.
About Pacific NorthWest LNG
Pacific NorthWest LNG is planning to build a world-scale LNG export facility on Canada's West Coast at Lelu Island near Prince Rupert, British Columbia. The proposed facility will comprise an initial development of two LNG trains of approximately 6 million tonnes per annum (MTPA) each and a subsequent development of a third train of approximately 6 MTPA. The proposed facility would liquefy and export natural gas produced by Progress Energy Canada in northeastern British Columbia. Pacific NorthWest LNG is committed to generating new economic and social benefits for the local community and First Nations, British Columbia and Canada in an environmentally safe and sustainable manner. PETRONAS of Malaysia is the majority owner of Pacific NorthWest LNG.
SOURCE Progress Energy Canada Ltd.For further information:
Vice-President, Corporate Relations and Land
Progress Energy Canada Ltd.
Senior Advisor, Corporate Affairs
Pacific NorthWest LNG