Petronas ponders options in Canada LNG venture
KUALA LUMPUR: National oil company, Petroliam Nasional Bhd (Petronas), is weighing the options to develop and monetise its gas resources in Canada after shelving the plan for a multi-billion dollar liquefied natural gas (LNG) project in British Columbia.
Executive vice-president and chief executive officer for Upstream, Datuk Mohd Anuar Taib, said among the possibilities under consideration would be investing in a pipeline to connect and market its gas resources from an area which has 22.3 trillion cubic feet (TCF) of proven unconventional gas to the rest of Canada and North America.
Petronas’ gas resources are located in North Montney area and are operated by unit, Progress Energy Canada Ltd. The area has been producing gas since 2012 , supplying to the Canadian market which has demand of 14 billions standard cubic feet (BCF) a day – roughly seven times that of Peninsular Malaysia.
“We are now looking at the pos-
We are now looking at the possibility of working together with partners or parties to look at a pipeline that could be built to connect that area to the rest of Canadian market. Datuk Mohd Anuar Taib, executive vice-president and chief executive officer for Upstream
sibility of working together with partners or parties to look at a pipeline that could be built to connect that area to the rest of Canadian market,” he told Bernama.
The pipeline, if it materialises, could give Petronas access to the rest of the North American market which has a size of about 84 BCF a day, or roughly 40 to 41 times, that of Peninsular Malaysia.
“So, now the story in Canada becomes ‘we (Petronas) have a significant proven resources, sitting in one of the largest markets in the world and there must be ways for us to monetise those resources’,” he said.
As a comparison, he said, Petronas’ unconventional Canadian gas acreage represented an area approximately twice the size of Melaka with resources roughly 30-35 per cent that of Malaysia’s proven gas resources.
Mohd Anuar said Petronas’ North Montney asset in the British Columbia province, currently produced about 600 million standard cubic feet per day (MMSCFD) of gas for the local market.
“For the first half of this year, we have generated revenue of about C$ 260-C$ 270 million (C$1 = RM3.45) out of that production,” he said.
Looking at potential returns from the Canadian operation, Mohd Anuar said, Petronas mulled ramping up output and such an option was still in the feasibility study stage.
“I don’t think we are going to do these (things) next year. We’re just going to study, making sure that we do it right.
“When you know the market is depressed, margin is also thin, whatever investment that we want to do, we must be able to do it with a lot more thinking and planning and making sure that value is not lost. So, that is the kind of Canada story for us,” he said.
He said Petronas must make an effort to cut production costs to remain competitive in the market.
“The key there ( Nor th Amer ic a) is about how competit ive can we be in that market. So, our team in Progress Energy Canada ( Petronas’ Canada subsidiary) has been doing a lot of improvement efforts,” Mohd Anuar said.
Progress Energy Canada managed to reduce between 1215 per cent of production costs in the last two to three years and is pushing for more to remain competitive, he said.
In 2012, Petronas acquired a 50 per cent working interest in Montney shale assets from Progress Energy Canada for C$ 1.07 bil lion, marking its entry into the Canadian unconvent ional gas play. — Bernama