Resource World Magazine

j u n e / j u l y 2 0 1 4 www.resourceworld.com 55 Progress Energy Canada Ltd., Pacific NorthWest LNG Ltd. and Petroliam Nasional Berhad (PETRONAS) have signed transaction agreements whereby China Petrochemical Corporation (SINOPEC), through its affiliates, will acquire a 15% interest in Progress Energy's LNG-destined natural gas reserves in northeast British Columbia 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 million tonnes of LNG per annum (MTPA), which represents a pro- rata 15% of the LNG facility's production, for a minimum period of 20 years. In addition to the transaction, SINOPEC, through its affiliates, has also signed a binding Heads of Agreement with PETRONAS for the purchase of 3 MTPA of LNG for 20 years sourced primarily from the Pacific Northwest LNG project. The 3 MTPA sale and purchase is in addition to the 1.8 MTPA of equity LNG offtake, making SINOPEC one of the largest LNG buyers from PETRONAS' portfolio. The transaction is subject to approval by the Chinese authority. This transaction builds upon the two previously announced transactions in 2013 that saw JAPEX Montney Ltd. acquire a 10% interest, PetroleumBRUNEI acquire a 3% interest in the project and the recent announcement on the acquisition of a 10% interest by Indian Oil Corporation Ltd. Following the closing of the Indian Oil Corporation and SINOPEC acquisitions, PETRONAS will hold 62% of the inte- grated project and will continue to work with potential customers and partners to secure markets for LNG. SINOPEC is the fourth partner in a con- sortium of LNG buyers which PETRONAS is bringing to the British Columbia LNG export project. Each of the partners will offtake a volume of LNG pro-rata to their upstream and downstream equity interest in the project. "We are pleased to conclude the addi- tion of another Pacific Rim market and investment into British Columbia which continues to highlight the attractiveness of Canadian natural gas," said Michael Culbert, President & CEO of Progress Energy, of Calgary. "Our energy export sector continues to gain momentum with this transaction and the addition of a fourth investor," added Greg Kist, President of Pacific NorthWest LNG, of Vancouver. Progress Energy Canada produces more than 400 million cubic feet equivalent of natural gas per day in northeast British Columbia and northwest Alberta. The company is expanding productive capac- ity 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. Pacific NorthWest LNG is planning to build a world-scale LNG export facility on Lelu Island near Prince Rupert, coastal British Columbia. The proposed facility will comprise an initial development of two LNG trains of approximately 6 million MTPA each and a subsequent develop- ment of a third train of approximately 6 MTPA. The proposed facility would liq- uefy and export natural gas produced by Progress Energy Canada in northeastern British Columbia. n china Petrochemical acquiring British columbia gas reserves OIL & g A S

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