Malaysia invests in Canada's natural gas future

Petronas, Malaysia's state-owned energy giant, announced Sunday it will invest $35 billion in the Canadian liquefied natural gas industry. British Columbia's government hopes to use the revenue generated by projects like this to pay down the province’s debt and to establish a prosperity fund to bank energy-related revenue.

|
Bazuki Muhammad/Reuters/File
Motorists queue to fill natural gas at a Petronas station with its landmark Petronas Twin Towers headquarters in the background, in Kuala Lumpur, Malaysia.

Petronas, the state-owned Malaysian energy giant, is planning to invest $35 billion in the Canadian liquefied natural gas (LNG) industry. This figure—which includes the $5.5 billion acquisition of Calgary-based Progress Energy Resources last year—covers $11 billion for an LNG export plant in British Columbia (B.C.), $5 billion for a proposed TransCanada pipeline to transport natural gas from northeastern B.C. to the coast, and natural gas extraction and processing costs expected over the life of the project.

Malaysian Prime Minister Mohd Najib made the announcement Sunday during a joint press conference with Canadian Prime Minister Stephen Harper, saying “I'm pleased to confirm that Petronas will set up a plant with all facilities including a pipeline to the plant”; “I’m told that this is the largest direct foreign investment in Canada by any country.” Harper said that he views “Petronas investments very positively” and that “the Government of Canada is very excited by that possibility as are all those I’ve talked to in the energy sector.” (Related article: EIA Predicts U.S to be 2013’s Largest Petroleum Producer)

B.C. currently produces 1.1 trillion cubic feet (Tcf) of natural gas annually, with over fifty percent of that coming from unconventional resources. The provincial government wants to triple that, hoping to reach an annual production capacity of 3 Tcf by 2020; key to this development is the construction of LNG export terminals that can open up key Asian gas markets. A Canadian National Energy Board report found that the Horn River Basin, a shale deposit in northeastern British Columbia, holds unconventional natural gas reserves of 78 trillion cubic feet (just under one third of the estimated size of the Marcellus play), and was optimistic that continued exploration would reveal further reserves. 

The provincial government hopes to use the revenue generated by projects like this to pay down the province’s debt and to establish a prosperity fund to bank energy-related revenue, similar to the sovereign wealth funds managed by neighbouring Alberta or energy-rich Norway. (Related article: Tensions Threaten Long Standing Natural Gas Partnership between EU and Russia)

Ottawa had previously blocked Petronas’ acquisition of Progress Energy Resources in October 2012, only to reverse its decision later that year. Foreign takeovers of Canadian national resources have sparked serious debate in the past, peaking with the $15 billion CNOOC’s acquisition of Nexen in 2012. The Nexen deal resulted in political backlash from the Conservative political base, which tends to view state-owned enterprise investment suspiciously.

Ottawa is walking a careful line, stating that it reserves the right to block future state-owned acquisitions, but that its policy of “discretion” will judge each foreign investment “on its merits.”

Original article: http://oilprice.com/Energy/Natural-Gas/Malaysian-National-Energy-Company-to-Invest-35-Billion-in-Canadian-LNG.html

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Malaysia invests in Canada's natural gas future
Read this article in
https://www.csmonitor.com/Environment/Energy-Voices/2013/1009/Malaysia-invests-in-Canada-s-natural-gas-future
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe