PETRONAS and Progress Energy Resources Corp. (Progress) welcome the Canadian Ministry of Industry’s decision to approve PETRONAS’ investment, which will help develop Canadian natural gas for the global liquefied natural gas (LNG) export market.
“This approval by the Canadian government marks an important step in our plans to develop a liquefied natural gas export business. This is an exciting day for Progress, British Columbia and Canadian trade expansion,” said Michael Culbert, President and CEO of Progress.
“Canada has great potential in the global LNG market – a growing market that’s already worth more than $300 billion per year. While international LNG trade is intensely competitive, new facilities such as our Pacific Northwest LNG project are vital to building Canada’s market position,” Culbert said.
Progress’ shareholders approved the transaction on August 28, 2012. PETRONAS and Progress have now received all necessary regulatory approvals for PETRONAS’ acquisitions of Progress and the transaction is scheduled to be completed on December 12, 2012. The acquisition will enable PETRONAS to secure long term strategic gas resources and leverage on Progress’ extensive experience in unconventional resource development to further grow its unconventional business. At the same time, PETRONAS will be bringing LNG experience and expertise in developing LNG infrastructure in Western Canada, thus further cementing its position as a major long term global LNG player.
PETRONAS' well-established and extensive network of LNG customers will add value to Canada’s natural gas resources and provide a strategic alternative to the traditional North American natural gas market. This will also generate substantial economic benefits to the local communities in terms of employment, increasing skill levels and other economic multiplier benefits.
“Our growth plans include three major Canadian investment components: Pacific Northwest LNG, which is the construction of a LNG export facility on Lelu Island in the District of Port Edward, near Prince Rupert; the continued upstream development of natural gas production in the Montney region of northeast British Columbia and northwest Alberta; and the eventual installation of a natural gas transmission pipeline, built by a third-party pipeline company, to move natural gas from the production fields to the LNG export facility,” said Tan Sri Dato’ Shamsul Azhar Abbas, President and CEO of PETRONAS.
“These components will create thousands of well-paid jobs during construction of the facility and pipeline, as well as permanent, ongoing operating jobs throughout our LNG business, from the Montney region to the West Coast,” he added.
The partners recently announced that Pacific Northwest LNG project is moving into the pre front-end engineering design (Pre-FEED) phase. The Pre-FEED phase will be undertaken to provide certainty around project scope and a further understanding of construction timelines, costs and labour force requirements. The estimated investment in the LNG export facility is expected to be between $9 billion and $11 billion, depending on the final project scope. The construction phase would result in up to 3,500 direct jobs and the long-term operations of the facility would result in 200 to 300 direct jobs.
Overall Pacific Northwest LNG plus the upstream and midstream investments represent significant revenue and royalties to the provincial and federal governments, and the opportunity for significant economic benefits to the local First Nations and communities.
A final investment decision for the project continues to be expected in late 2014, followed by the first LNG exports in 2018.
Pacific Northwest LNG will be opening an office in Vancouver, British Columbia in early 2013 and will be growing its project team. More information, including a project backgrounder, is available at www.pacificnorthwestlng.com.
SOURCE: Progress Energy Resources Corp.