Sinopec buys 15% stake in Petronas Canada LNG

China Petrochemical Corp. agreed to buy a 15% stake in gas reserves and a proposed liquefied natural gas (LNG) facility in British Columbia from Petroliam Nasional Bhd. for an undisclosed amount.

Sinopec, as the Chinese company is known, will get 1.8 million tpy of LNG for 20 years, about 15% of the terminal’s output, Petronas said in a statement. Sinopec also agreed to buy 3 million tpy of LNG for 20 years from Petronas, making it one of the Malaysian state-owned company’s largest buyers of the fuel.

Petronas, which acquired Progress Energy Canada in 2012, will hold 62% of the integrated project after the sale. The company has previously announced the sale of stakes in the terminal to Indian Oil, Brunei National Petroleum and Japan Petroleum Exploration.

The acquisition gives the Chinese oil company access to at least 8.35 trillion cubic feet of gas reserves in British Columbia fields controlled by Progress Energy Canada. The Kuala Lumpur-based company aims to reduce its share in Pacific NorthWest LNG, which runs the gas-export facility, to as low as 50% by selling stakes to Asian gas buyers, the unit’s President Greg Kist said in November.

The LNG export project on Canadia’s west coast, with an estimated price tag of C$9 billion ($8.2 billion) to C$11 billion, will produce as much as 19.68 million tpy of LNG for 25 years starting in 2018, according to an application to Canada’s National Energy Board.