Indian Oil Corporation (IOCL), India's largest oil marketing company, announced that the company through its wholly owned affiliate IndOil Montney, Canada have signed transaction agreements with Progress Energy Canada (Progress Energy Canada), PETRONAS Carigali Canada BV (PCC BV) wholly owned affiliates of Petroliam Nasional Berhad (PETRONAS).
The transaction is signed for the acquisition of a 10% interest in Progress Energy Canada's LNG-destined natural gas reserves in northeast British Columbia and in the proposed Pacific Northwest LNG (PNW LNG) export facility on Canada's West Coast.
As part of the transaction, IOCL shall also offtake 1.2 million tons of liquefied natural gas (LNG) per annum, which represents 10% of the LNG facility's production, for a minimum period of 20 years. JAPEX Montney with 10% and Petroleum BRUNEI with 3% are the other partners who acquired their interest in the project in 2013. PETRONAS will hold the remaining 77% of the integrated project.
The project holds 2P reserves at year end 2013 of 8.35 Tcfe and best case contingent resources of 24.7 Tcfe. The total reserves and resource potential is in excess of 50 Tcfe in which, IOCL share will be over 5 Tcfe. Progress Energy Canada is currently producing approximately 400 million cubic feet equivalent of natural gas per day in North East British Colombia which is currently supplying the Canadian market.
Pacific NorthWest LNG is working towards a world-scale LNG export facility on Canada's West Coast at Lelu Island near Prince Rupert, British Columbia. The proposed facility would liquefy and export natural gas produced by Progress Energy Canada and partners in northeastern British Columbia.
The acquisition of this interest in PNW LNG integrated project gives IOCL the opportunity to be part of a world class large-scale resource play and greenfield LNG development in a stable Canadian regime, providing IOCL access to significant upstream gas resources and securing LNG volumes for the domestic market.
Shares of the company gained Rs 2.75, or 1.04%, to settle at Rs 266.60. The total volume of shares traded was 303,613 at the BSE (Friday).