Progress Energy, Pacific NorthWest LNG and Petronas have signed agreements whereby China Petrochemical Corporation (Sinopec), through its affiliates, will acquire a 15% interest in Progress Energy’s gas reserves in northeast British Columbia (Canada) and in the proposed Pacific NorthWest LNG export facility on Canada’s West Coast. As part of the transaction, Sinopec has agreed to offtake 1.8 Mt/year of LNG, representing 15% of the LNG facility’s production, for a minimum period of 20 years. In addition to the transaction, Sinopec has also signed a binding Heads of Agreement (HoA) with Petronas for the purchase of 3 Mt/year of LNG for 20 years sourced primarily from the Pacific Northwest LNG project. The 3 Mt/year sale and purchase is in addition to the 1.8 Mt/year of equity LNG offtake. The transaction is subject to approval by the Chinese authority.
Pacific NorthWest LNG is a proposed 12 Mt/year liquefaction project located at Lelu Island near Prince Rupert, British Columbia. The project is developed by Progress Energy (fully owned by Petronas of Malaysia), which will retain 62% of the project when the sale of minority stakes (10% to Japex, 3% to PetroleumBrunei and 10% to Indian Oil Corporation) will be completed. The US$11bn project is expected to be completed in 2018 with commercial operations scheduled for early 2019.