Indian Oil Corp. Ltd. (IOC) has signed an agreement with Progress Energy Canada Ltd., Calgary; Pacific Northwest LNG Ltd. (PNW LNG), Vancouver, BC; and Malaysia’s Petronas in which affiliates of IOC will purchase 10% interest in the proposed PNW LNG export facility on Canada’s west coast and Progress Energy’s LNG-destined gas reserves in northeast British Columbia.
As part of the transaction, IOC has agreed to offtake 1.2 million tonnes/year (tpy) of LNG for a minimum of 20 years. The volume represents 10% of the LNG facility’s production.
Japan Petroleum Exploration Co. in 2013 agreed to join the venture and bought a stake in the North Montney shale gas project from Petronas, which acquired the PNW LNG export terminal project in 2012 when it bought Progress Energy Resources Corp. for $5.4 billion (OGJ Online, June 28, 2012; Mar. 5, 2013).
Following the closing of the IOC acquisition, Petronas will hold 77% of the integrated project.
Over the past year, Progress Energy and its North Montney Joint Venture (NMJV) partners have more than tripled their natural gas reserves to support LNG exports from northeast British Columbia.
An independent yearend 2013 evaluation has estimated the NMJV total proven and probable reserves additions in 2013 to be 960 million boe (5.76 tcfe), a 211% increase from the yearend 2012 balance of 450 million boe (2.68 tcfe). This results in total 2P reserves at yearend 2013 of 1.39 billion boe (8.35 tcfe).
In addition, a contingent resource assessment was also completed resulting in a best case contingent resource of 24.7 tcf with 65% of the NMJV land delineated to date.
This year Progress plans to operate an average of 25 rigs to drill an estimated 170 wells, resulting in 2,500-3,000 direct and indirect jobs.
The development of PNW LNG’s facility is progressing steadily with plans to reach a final investment decision by year end while targeting first LNG exports late in 2018.
The competitive front-end engineering and design (FEED) phase, involving three major engineering and construction consortia, is well-advanced and PNW LNG is targeting this year’s third quarter for the receipt and evaluation of the engineering, procurement, construction, and commissioning bids. The design is for two trains of 6 million tpy each with the option for a third train of the same size.
The LNG facility planned near Prince Rupert, BC, will undergo an environmental review this year by the Canadian Environmental Assessment Agency and the BC Environmental Assessment Office. This review includes ongoing consultation with stakeholders and First Nations. PNW LNG has held numerous open houses where local residents and affected stakeholders have had the opportunity to learn about the LNG project benefits and voice concerns.
To connect the partners’ gas reserves in northeast British Columbia with the LNG plant on the west coast, TransCanada Corp. is advancing plans to build the North Montney Mainline project into the gas fields as well as the Prince Rupert Gas Transmission (PRGT) pipeline to the coast.
The 305 km North Montney Mainline application has been made to the NEB. This regional pipeline would extend from the Groundbirch area, about 35 km southwest of Fort St. John, BC, north to gather gas through the NMJV operations along the Alaska Highway. PRGT would then transport the gas to the Prince Rupert area along a 900 km route that is under consideration and selection with input from First Nations and community stakeholders.

Source: http://www.ogj.com/articles/print/volume-112/issue-3b/general-interest/ioc-to-buy-stake-in-proposed-pnw-lng-terminal.html