Petronas to farm out certain Canadian assets to MidOcean Energy

Malaysia’s Petronas has agreed to farm out a portion of its interest in certain assets in Canada to MidOcean Energy, an LNG company formed and managed by institutional investor EIG.

The deal includes a 20% interest in the North Montney Upstream Joint Venture (NMJV), which hold Petronas’ upstream investment in Canada, and a 20% interest in the North Montney LNG LP (NMLLP), which holds Petronas’ 25% participating interest in the LNG Canada Project in Kitimat, BC, on Canada’s west coast.

LNG Canada, Canada’s first LNG export project, shipped its first LNG cargo from the 14-million tonne/year plant earlier this year.

NMJV holds more than 800,000 gross acres of mineral rights with 53 tcf of natural gas reserves and contingent resources.

Petronas said the equity participation will not affect its existing control over NMJV and NMLLP. 

Following completion of deal, which is expected in this year’s fourth quarter, MidOcean will hold a position across the integrated value chain, spanning upstream resource development in the North Montney and downstream liquefaction and export through LNG Canada via its participation in NMLLP.

Through this partnership with Petronas, MidOcean will have the ability to secure an associated LNG volume of 0.7 million tpy with potential to grow through LNG Canada Phase 2.