May 15, 2014 11:45 am JST

Malaysia's Petronas to further reduce stake in Canadian LNG facilities

CK TAN, Nikkei staff writer

KUALA LUMPUR -- Malaysia's national oil company Petronas says it is in negotiations to further reduce its stake in Canadian liquefied natural gas export facilities worth $11 billion to share the cost of investment.

     Petronas announced last month that China Petrochemical Corporation (Sinopec) will acquire 15% equity in the project. Sinopec also agreed to buy 4.8 million tons of LNG per annum from Petronas for 20 years.

     Prior to that deal, Petronas had secured 10% equity participation from Japan Exploration Petroleum and Indian Oil Corporation, as well as 3% from Brunei National Petroleum Company.

     "The idea is to reach up to 50%. We are in the process and talking to three to four companies to take up an additional 10%," said Petronas President & CEO Shamsul Azhar Abbas at a Wednesday press briefing.

     Petronas acquired the Canadian energy company, Progress Energy Canada, for $5 billion in 2012, giving it access to shale gas reserves in northeast British Columbia. Through its other subsidiary, Pacific NorthWest LNG, it is building LNG export facilities on Canada's west coast.  

     For its first quarter ended March, Petronas posted 84 billion ringgit ($26 billion) in revenue, up 10% compared with the same period last year. The better sales were aided by higher demand for its petroleum and gas products, production resumption in South Sudan and new operations in Iraq. However, net profit fell 8% to 18.7 billion ringgit, due to higher operating costs.