PETRONAS to join LNG Canada project

As a result of this transaction, if approved and upon closing, ownership interests in LNG Canada would be Shell Canada Energy, a subsidiary of Royal Dutch Shell plc (“Shell”), (40%); PETRONAS (through NMLLP), (25%); PetroChina Kitimat LNG Partnership, a subsidiary of PetroChina Canada Ltd., (15%); Diamond LNG Canada Ltd., a subsidiary of Mitsubishi Corporation, (15%); and Kogas Canada LNG Ltd. (5%).

British Columbia (B.C.) is home to one of the largest and most accessible sources of natural gas in the world. If constructed, LNG Canada participants will ship natural gas, including from B.C.’s vast reserves, to various countries where the imported gas could displace more carbon intensive energy sources, helping to reduce greenhouse gas emissions.

LNG Canada recently selected the joint venture of JGC Corporation (“JGC”) and Fluor Corporation (“Fluor”) as the Engineering, Procurement and Construction (EPC) contractor for the project and is currently finalising materials in preparation for a final investment decision (FID) by joint venture participants.

The transaction announced today does not amount to an FID which remains pending. The timing and outcome of an FID will be decided by joint venture participants based on global energy markets, and the overall competitiveness and affordability of the project.

The LNG Canada joint venture is proposing to build a liquefied natural gas (LNG) export facility in Kitimat, British Columbia, Canada, that would initially consist of two world-scale LNG processing units, referred to as “trains”. The project would include an option to expand to four trains in the future.

Shell has been a pioneer in LNG for more than 50 years and is involved in every stage of the LNG value chain: from finding the fields, extracting the gas and liquefying it; to shipping LNG and turning it back into gas; to distributing it to customers. Shell has LNG supply projects around the world, as well as interests in and long-term capacity access to regasification plants. Shell Canada Energy is a wholly owned subsidiary of Royal Dutch Shell plc.

PETRONAS is a fully integrated energy company with extensive experience in LNG. Through its wholly owned upstream energy company Progress Energy and its partners, PETRONAS is one of the largest natural gas reserves owner in Canada – with the majority of these reserves in the North Montney natural gas formation in northeast British Columbia. The North Montney LNG Limited Partnership is a wholly-owned entity of PETRONAS.

Mitsubishi Corporation is Japan’s largest trading company with more than 50% share of LNG imported into Japan. Mitsubishi has been investing in LNG since 1969 and has an interest in 11 LNG export projects globally, many in conjunction with Shell. Diamond LNG Canada Ltd. is a wholly owned subsidiary of Mitsubishi Corporation.

PetroChina Kitimat LNG Partnership is a wholly owned subsidiary of PetroChina Canada Ltd., an integrated oil and gas company, with interests in upstream, midstream and downstream operations in Alberta and British Columbia. Founded in 2010, PetroChina Canada Ltd. is a wholly owned subsidiary of PetroChina Company Limited, headquartered in Beijing, People’s Republic of China.

Kogas Canada LNG Ltd.is a wholly owned subsidiary of Korea Gas Corporation, which is Korea’s only fully-integrated natural gas provider and one of the world’s largest LNG importers.

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