China Petrochemical Corp, or Sinopec, and state-owned power group China Huadian Corp will acquire a combined 15 percent stake in a Canadian liquefied natural gas (LNG) project from Malaysia’s Petroliam Nasional Bhd, or Petronas. A Petronas statement did not specify how much Sinopec and Huadian paid for the stake.
As part of the arrangement, Sinopec will receive 1.8 million tons of LNG every year for 20 years starting in 2018. Sinopec also signed another agreement with Petronas that will bring an additional 3 million tons of LNG to China every year for 20 years.
Petronas acquired the Pacific Northwest LNG project in June 2012 through Progress Energy Resources Corp., a subsidiary they purchased for $5.2 billion. When the LNG plant is operational in 2018, it is expected to export 12 million tons of LNG per year.
Since acquiring the Pacific Northwest LNG project, Petronas has been selling off stakes to fund its development. Petronas sold a 10 percent stake to Japan Petroleum Exploration Co. in 2013 and another 10 percent stake to Indian Oil Corp. in 2014. Both of these companies will receive 1.2 million tons of LNG annually after the project is completed.