MidOcean Energy on Tuesday confirmed its participation in the newly sanctioned second development of LNG Canada in British Columbia via a partnership with Petroliam Nasional Bhd (Petronas).
“MidOcean’s participation in Phase 2 will increase associated LNG volumes, from 0.7 mtpa [million metric tons per annum] to 1.4 mtpa, and deepen its position across the integrated LNG value chain, spanning upstream gas production in the North Montney and liquefaction and export through LNG Canada”, the EIG portfolio company said in a press release.
“The investment is consistent with MidOcean’s strategy to build a large, diversified, cost- and carbon-competitive global LNG portfolio, and reinforces its position as a long-term partner of choice for high-quality LNG projects across the Pacific Basin”.
MidOcean chief executive De la Rey Venter said, “We have long believed in LNG Canada as one of the world’s most advantaged projects: with the scale, resource depth and Pacific Basin access to deliver reliable energy to global markets for decades”.
MidOcean’s involvement in LNG Canada phase 2 is via a 20 percent stake in North Montney LNG LP, which holds Petronas’ 25 percent stake in LNG Canada.
That was part of a transaction through which MidOcean also acquired a 20 percent interest in the North Montney Upstream Joint Venture (NMJV), which holds Malaysian state-owned Petronas’ upstream investment in Canada. According to MidOcean’s announcement of the transaction last year, the NMJV had over 800,000 gross acres of mineral rights with 53 trillion cubic feet of reserves and contingent resources.
On Tuesday the Shell PLC-led LNG Canada Development Inc announced a final investment decision to proceed with phase 2, which will double the facility’s capacity to 28 million metric tons per annum (MMtpa) by building two additional trains.
LNG Canada, which has a current capacity of 14 MMtpa through two trains, began operations last year, debuting Canada as an LNG exporting country. The consortium expects to launch phase 2 into service “in the early 2030s”, Shell said.
Shell, the majority owner with a 40 percent stake, said it is entitled to nearly six MMtpa from phase 2. The other owners are China’s state-owned PetroChina Co Ltd and Japan’s Mitsubishi Corp, each holding 15 percent. South Korea’s state-owned Korea Gas Corp owns five percent.
“LNG Canada will continue to operate under an equity lifting structure, whereby each joint venture participant is responsible for the offtake of its proportionate share of LNG production and for bringing its share of gas supply”, Shell said.
Phase 2 will also install an additional LNG storage tank, condensate tank and loading berth, as well as expanded utility and process systems.
“Coastal GasLink will expand the capacity of the existing 670-kilometer [about 420 miles] pipeline through the construction of five new compressor stations”, Shell added.
Besides MidOcean as a new indirect investor, phase 2 would also involve investment from five First Nations neighboring the project – the Gitga’at Nation, the Gitxaała Nation, the Haisla Nation, the Kitselas First Nation and the Kitsumkalum First Nation.
LNG Canada said last year it had signed an agreement with MNT Investments LP that would allow the limited partnership between the five First Nations to invest in phase 2 under a leaseback scheme.
“Today’s phase 2 decision enables the implementation of that equity option through an investment of up to CAD 1 billion [over $705 million] in a special purpose entity that will purchase the future LNG storage tank to be built as part of phase 2”, LNG Canada said separately on Tuesday.
source: rigzone.com