Petroliam Nasional Bhd (Petronas) is keenly waiting for Argentina’s Congress to complete the legislative process of a law relating to the liquefied natural gas (LNG) industry before deciding whether to proceed with its plans to collaborate with the Latin American nation’s state-controlled energy firm YPF S.A. on an LNG project.
Petronas chief operating officer and gas business executive vice-president Adnan Zainal Abidin said the parties are in the midst of finalising development concepts for the integrated LNG plant.
“The draft law has been submitted to Congress and it is being reviewed by various committees. We hope at the latest by the first quarter of 2024 we have a decision by Congress,” he said at a press conference on Wednesday.
Petronas president and chief executive officer Tan Sri Tengku Muhammad Taufik said the company will only pursue the LNG project in Argentina if it is given the assurance that there is a dedicated upstream supply.
“We don’t want the molecules flowing into the LNG plant as a matter of last choice, we want to make sure it’s dedicated,” he said.
Muhammad Taufik added that other considerations Petronas will weigh prior to progressing its endeavours in Argentina are the specifics of the LNG law, namely questions of repatriation, local contests and contracting obligations.
“The final decision will depend largely on the outcome of the passing of the law. We are monitoring what is happening in Argentina right now, the situation there is fluid.
“As any investor would want to ensure, we want to ensure the parameters are within tolerable investment limits and we get an investment horizon that makes sense for us. At the end of the day, from the feasibility and resource [standpoint] we are seeing very positive signs,” he said.
Petronas in September last year signed a memorandum of understanding with Argentina’s largest integrated oil and gas company YPF to pursue a collaboration in that country in an integrated LNG project and other areas, including upstream oil, petrochemicals and clean energy solutions.
Canada LNG facility progressing
Meanwhile, Petronas said that in Canada, Phase One of the LNG Canada facility is 85% complete with its first train ready for start-up. Petronas owns 25% stake in the integrated plant.
“We are hopeful and confident to deliver the first commercial cargo in the second half of next year, [and] if not, by 1Q2024. That’s our aspiration,” Adnan said.
A separate pipeline is 93% constructed, with completion expected by the end of this year, Adnan added. Built by TC Energy, the 670km pipeline transporting natural gas to the LNG Canada facility is dubbed the Coastal GasLink project and will source gas from near Dawson Creek.
“The challenge now is to work with our partners in the LNG Canada Venture to quickly evaluate and FID LNG Canada Phase Two… the larger the facility, the better the unit production costs, which will make Canada able to offer that LNG as an energy transition solution,” Muhammad Taufik said.
“Part of the supply will serve the Far East Asian market which is “clearly in need of more gas,” he added.
Aside from the facility, Canada is also one of Petronas’ most prominent overseas ventures with 53 trillion cubic feet of gas reserves, held through its 72% stake in the North Montney Joint Venture. Other partners include Sinopec Corp (15%), Indian Oil Corp (10%), and Petroleum Brunei (3%).