Malaysia’s state oil firm Petroliam Nasional (Petronas) said today it will sell 15% of its Canadian shale assets in northeastern British Columbia to China Petrochemical Corp (Sinopec).


China’s largest petrochemical producer will absorb 1.8 million tonnes of liquefied natural gas from the facility’s annual production for at least 20 years, Petronas said in a statement.

It did not specify a value for the deal.

Sinopec also signed an additional agreement to buy 3 million tonnes of LNG per year for the same duration sourced mainly from a proposed export facility on Canada’s West Coast.

The deal with Sinopec was signed by Petronas and its subsidiaries Progress Energy Ltd and Pacific Northwest LNG Ltd.

Petronas bought Canada’s Progress Energy Resources Corp in 2012 in a C$5.2 billion (RM15.43 billion) deal that included the shale gas properties.

It will make Sinopec the largest foreign player and second biggest shareholder in the project behind Petronas, which holds 62%.

Indian Oil Corp Ltd and JAPEX Montney Ltd have each acquired 10% stakes, while Petroleum Brunei has 3%.

Each stakeholder will buy a volume of LNG equal to their equity stake.

The Sinopec deal is subject to approval by the relevant Chinese authorities.

Bank of America Merrill Lynch served as financial adviser to Petronas. – REUTERS