Petronas considers BC comeback; with a Kitimat destination possibly in mind

As things are shaping up, the North Coast may not have heard the last of Petronas Energy after all, with growing speculation in play that the Malaysian energy giant is about to take a stake in the proposed Kitimat LNG project.

The potential return to the region could come as Chevron Oil considers its future with the proposed Kitimat project, with financial and energy observers noting that the American based energy company may be planning to sell its shares to the Petronas group.

Reuters news service out of the United Kingdom was the first to outline the latest twist to the LNG files for British Columbia yesterday.

Chevron in talks to sell stake in LNG project

That theme from Reuters has begun to gain some traction in British Columbia, particularly in the gas rich Northeast area where the company holds gas field rights.

Petronas said to possibly be looking to buy Chevron's stake in Kitimat LNG
Chevron in talks to sell minority stake in Kimtiat LNG project

While Petronas closed the door to it's Prince Rupert plans back in July of 2017 , the Malaysian energy company has held onto its upstream holdings in natural gas, and often hinted that it was not against further investment in the industry should the right opportunity open up.

As part of their recent review of their 2017 performance, the Malaysian company noted that revenues had improved by the final days of the year, providing for a 14 per cent improvement from the same quarter of 2016.

Something which has the company thinking of future projects, should they find a project that meshes with their plans for development.

With Petronas a major investor in the Northeast BC Gas fields, the match up with one of the still in the planning stage LNG terminals in the province would seem a natural fit, particularly if there are partners involved.

If the speculation is correct, that right opportunity is now located about two hours to the southeast of Prince Rupert and if Petronas does move to take on the Chevron shares, the prospect of the Kitimat LNG project moving forward would seem more robust than it has been in many, many months.

Rumours are flying that Petronas may soon reenter the BC LNG terminal
planning, with a potential share of the Kitimat LNG project

The Kitimat LNG terminal project is being promoted by Chevron and the Australian energy company Woodside (which at one time was also kicking tires in Prince Rupert),  Woodside and Petronas are familiar to each other so they could bring some impressive financial heft to the project, as they look to develop their Natural gas reserves in Canada for export to their side of the globe.

Last week we observed that Shell, one of the partners in the other Kitimat area project LNG Canada had forecast a shortage of gas supplies in the near future, suggesting that the their project could help fill some of that projected shortfall.

Should all of this intrigue from the financial papers play out with development money, Kitimat could soon be the centre of the BC LNG industry, should the provincial government wish to actually develop one.

That's a theme that Skeena MLA Ellis Ross addressed last week in the Legislature, calling for the provincial government to show that it still supports the concept of an developing an LNG industry in BC.

For its part, the Kitimat region has provided for perhaps the warmest welcome for investors of the Northwest, with local officials and First Nation government's strongly involved in keeping the flame of potential development alive.

More notes on the Kitimat LNG proposal can be found from our archive page here.

For history buffs our archive of the Petronas story in the Prince Rupert area can be found here.

To return to the most recent blog posting of the day, click here.