KUALA LUMPUR (Aug 22): Having decided not to proceed with its multi-billion dollar liquefied natural gas (LNG) project in British Columbia, Petroliam Nasional Bhd (Petronas) is reportedly considering developing and monetising its Canadian gas resources.
According to a report by Bernama this morning, the possibilities under consideration include investing in a pipeline to connect and market its gas resources from an area which has 22.3 trillion cubic feet (TCF) of proven unconventional gas to the rest of Canada and North America, citing Petronas’ executive vice president and chief executive officer for Upstream, Datuk Mohd Anuar Taib.
The national oil firm’s gas resources are situated in the North Montney area and are operated by Progress Energy Canada Ltd.
The area has been producing gas since 2012, supplying to the Canadian market which has a daily demand of 14 billion standard cubic feet (BCF), equivalent to about seven times that of Peninsular Malaysia.
“We are now looking at the possibility of working together with partners or parties to look at a pipeline that could be built to connect that area to the rest of Canadian market,” Mohd Anuar said.
In 2012, Petronas made its entry into the Canadian unconventional gas market, when it acquired a 50% working interest in Montney shale assets from Progress Energy Canada for 1.07 billion Canadian dollars.
It eventually acquired the entire stake in Progress Energy Canada for approximately 6 billion Canadian dollars, followed by a purchase of Talisman Energy Inc’s North Montney asset for 1.5 billion Canadian dollars, to become among the largest natural gas reserves owners in Canada, with approximately 323,748 hectares of largely contiguous mineral rights and over 52 TCF of reserves and contingent resources.
On July 25 this year, Petronas announced it is dropping plans for the 36 billion Canadian dollar Pacific Northwest LNG project, which was supposed to produce 12 megatonnes of LNG per year, citing the prolonged weak LNG market which is expected to last till 2023, as its reason.