Malaysia's Petronas to spend $35 bln on Canadian LNG project

KUALA LUMPUR Sun Oct 6, 2013 9:40pm EDT

KUALA LUMPUR Oct 7 (Reuters) - Malaysia's state oil firm Petronas plans to spend $35 billion to develop shale gas assets in Canada and build a liquefied natural gas (LNG) export terminal linking the country to energy hungry Asian markets, company officials said.

The estimate is $15 billion higher than the figure previously announced, since it includes costs associated with drilling wells in British Columbia and taking over Canadian explorer Progress Energy Resources for $5 billion, they said.

Malaysian Prime Minister Najib Razak was quoted as saying in newspapers that the project, announced last year after Petronas bought Progress Energy, would make the Southeast Asian country the biggest foreign investor in Canada.

"There is a 30-year timeline for the $35 billion investment," Najib said after holding bilateral meetings with Canadian Prime Minister Stephen Harper on Sunday.

Petronas had previously said it would spend $20 billion to build two LNG trains, which super chill gas into liquid form, on the West Coast. This includes a pipeline to be built by TransCanada Corp from the fields in the shale-rich Montney region. The trains are expected to be ready by the end of 2018 or 2019.

A final investment decision on the entire project will be taken by the end of 2014, Petronas has said.

The firm is in talks to sell stakes in the entire project to potential LNG buyers and has finalised one such deal with Japan Petroleum Exploration Co.

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