LNG

Pacific Oil & Gas, the Asian-based developer of the Canadian Woodfibre LNG export project in British Columbia, is buying Canbriam Energy, a producer of natural gas in the Montney Shale basin of northeast BC.

Pacific Oil & Gas is a subsidiary of the Royal Golden Eagle group of Indonesian businessman Sukanto Tanoto and whose headquarters are in Singapore.

The Asian and Canadian companies said the Canbriam transaction would create a well-capitalized entity able to grow from its current production of about 200 million cubic feet per day of natural gas, including 6,000 barrels per day of associated natural gas liquids.

The Woodfibre liquefaction and export plant is being built on the site of a former pulp mill at Squamish, north of Vancouver, and is licensed to export more than 2 million tonnes per annum of LNG.

The relatively small-scale Canadian LNG project is expected to start commercial operations by about 2023.

The PO&G purchase of Canbriam includes its natural gas processing plants and water-handling infrastructure to support natural gas pipeline transportation.

“Canada has the opportunity to become a leader in the global energy transition,” said Ratnesh Bedi, President of PO&G.

“Canbriam is one of the lowest cost producers in the Montney and we welcome the opportunity to work in Canada and produce some of the cleanest natural gas,” added Bedi.

Paul Myers, Canbriam’s President and Chief Executive, welcomed his company’s sale to such an experienced energy player.

“This transaction supports ongoing development of our prolific Montney assets and aligns us for future natural gas exports. We warmly welcome Pacific Oil & Gas as our new owner,” stated Myers.

The Woodfibre LNG project is one of the few moving forward on the Canadian West Coast where more than a dozen were previously planned.

Woodfibre owner PO&G also has LNG import assets in China. It holds a 35 percent stake in the Rudong LNG import terminal in China's eastern Jiangsu Province, with 55 percent held by Kunlun Energy, a Hong Kong-listed subsidiary of PetroChina.

PetroChina itself is an investor in the largest LNG export project moving forward in BC, the LNG Canada joint venture with 20 MTPA of initial output led by Royal Dutch Shell and with other stakeholders including Mitsubishi Corp. of Japan and Korea Gas Corp.

The closing of the Canbriam transaction is expected to occur before July 2019.

Macquarie Capital Markets Canada is the acting financial advisor to PO&G and Bennett Jones is acting as legal counsel.

RBC Capital Markets is the advisor to Canbriam and Norton Rose Fulbright Canada is giving legal counsel.

April 12 (LNGJ) - LNG Canada, the Royal Dutch Shell-led joint venture in British Columbia, said that Chief Executive Andy Calitz would step down on July 1 to be replaced by another Canada-based Shell executive Peter Zebedee. The announcement comes six months after LNG Canada’s positive final investment decision to build the export plant near the town of Kitimat. Calitz and successor Zebedee have worked for Shell for much of their careers.

   Calitz, who was educated and began his energy industry career in South Africa, began working for Shell in 1996 and has led the LNG Canada project for six years. He is scheduled to return to Shell’s headquarters in The Hague when he leaves his post. Zebedee currently works for Shell in the Canadian city of Edmonton in Alberta and will relocate to BC.

LNG Canada, the Royal Dutch Shell-led export joint venture in British Columbia, said that it was unlikely the continuing dispute over the Coastal GasLink feed-gas pipeline would stop the overall project advancing to completion.

“I do not see a single scenario that would cause the construction of this pipeline to be stopped,” said Andy Calitz, LNG Canada’s Chief Executive.

Opponents have mounted a legal challenge saying the pipeline was a federal undertaking and should have sought approval from the National Energy Board, rather than the province of British Columbia.

The federal regulator agreed in December to consider the jurisdictional challenge and has requested evidence from all the parties.

“It’s a complex world, the paths are not clear,” said Calitz, pointing out that any decision by the federal regulator could later be appealed in the courts.

“But what I am clear about is that this pipeline, by the time that happens, will be in advanced construction,” stated Calitz.

The LNG Canada project is the largest private sector investment in Canada's history with spending of C$40 billion (US$30.2Bln).

Shell and its four partners, Mitsubishi Corp. of Japan, Malaysian energy company Petronas, Chinese major PetroChina and Korea Gas Corp., had agreed in October 2018 to start immediate construction at the brownfield site near Kitimat that had been an energy products terminal before being acquired by Shell in 2011.

Shell was pressing ahead while recognizing that it was likely not possible to get unanimous support for a major infrastructure venture project in BC.

Calitz has said he believed that the Canadian economy would find it difficult to prosper without a growing and healthy resource sector.

The US$5-billion pipeline of 670 kilometres is being developed by TransCanada Corp. to bring the feed-gas from the Montney shale basin in northeast BC to the Pacific Coast.

TransCanada is also seeking to sell a stake in the pipeline project. Calitz said that the pipeline company’s stake sale was expected and did not reflect concerns about greater risk.

“It has always been a part of the financing strategy for the project,” Calitz said.

“The sale plan has no impact on either the construction or the capacity or any other aspect of the project,” he added.

Steelhead LNG has stopped work on the Kwispaa LNG project in Sarita Bay on Vancouver Island’s west coast, casting doubt on the future of the joint venture that found little encouragement among officials and politicians in the Pacific coast province of British Columbia.

The Royal Dutch Shell-led LNG Canada project has become the main issue in the province of British Columbia in the run-up to the Canadian federal election this year, with Prime Minister Justin Trudeau emerging as a supporter of the venture amid renewed protests.

The Texas-based private equity firm, BP Energy Partners (BPEP), has purchased a controlling interest in Cryopeak LNG Solutions Corp., a small-scale Canadian provider of liquefied natural gas to users in remote locations.

Canadian Woodfibre LNG President David Keane said the small-scale liquefaction and export venture proposed for the district of Squamish in British Columbia was expected to move to the construction phase in the first quarter of 2019.

Steelhead LNG, the Canadian project developer, said its Kwispaa floating export venture proposed for Sarita Bay at Vancouver Island has filed for regulatory permits from the provincial British Columbia government and the federal authorities in Ottawa.

Royal Dutch Shell Chief Executive Ben van Beurden, has confirmed the final investment decision to take forward the LNG Canada export project in British Columbia to turn the huge surplus of Canadian natural gas into LNG and ship it to Asian nations.

LNG Canada, the project in British Columbia led by Royal Dutch Shell, is still on track to move forward in the fourth quarter of 2018 as the nation’s energy sector struggles in the wake of the booming US energy business.