Growing Asian investment fuels momentum for Canadian-led LNG export
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
Progress Energy Canada - building a world-class inventory of natural gas
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,"
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
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