Decision on Canadian deal by end-2014

PETALING JAYA: Petroliam Nasional Bhd (Petronas) expects to reach a final investment decision (FID) for its Canadian shale gas venture by the end of 2014.

Petronas gas and power business executive vice-president Datuk Anuar Ahmad said the company was conducting a definitive feasibility study for the venture and expects to conclude it by August.

The company first ventured into Canada after striking a C$1.07bil deal with Canada’s Progress Energy Resources Corp for a 50% stake in three shale gas assets in northeastern British Columbia province.

It was reported that Petronas would pay C$267.5mil for its share in the three fields and fund 75%, or up to $C802.5mil, in field development costs for the next five years.

Both parties had also agreed to conduct a feasibility study on the viability of launching an integrated LNG export facility in Western Canada which would provide a strategic alternative to the traditional North American pipeline gas market.

Shale gas, an unconventional source of natural gas, has become feasible after technology enabled companies to drill horizontally and extract gas from reservoirs.

Speaking on the sidelines of the World Gas Conference, Anuar said there had been no progress yet on the company’s discussion to strike a Canadian deal exceeding US$5bil, in what was said to be a bid to drive the supply of natural gas to Asia.

“There was discussion and unfortunately there was no progress. For the time being, the discussion is off,” he said.

Besides its Canadian venture, the company also has an Australian gas project which is named the Gladstone LNG project.