KUALA LUMPUR/MILAN, Sept 30 (Reuters) - Malaysian state oil firm Petroliam Nasional Bhd is considering selling its majority stake in a $27 billion Canadian liquefied natural gas (LNG) plant, three people familiar with the matter said this week.
Petroliam Nasional, or Petronas, is weighing options for the project as its finances have been squeezed after crude oil prices have collapsed by more than 50 percent since the middle of 2014. Additionally, the economics of the project have been called into question as LNG prices for delivery into the main markets in northeast Asia have slumped more than 70 percent over nearly the same time period. LNG-AS
Petronas was given the go-ahead for the project by the Canadian government earlier this week. It said then that executives would study the conditions imposed by the Canadian authorities and conduct a review before deciding on the next steps.
Petronas on Friday said it will not provide any additional comment when asked about the potential sale.
The sources said Petronas has been considering a sale for months, after it became apparent that a Canadian approval was possible, but had yet to take a final decision. Other options are also being considered, including putting it on ice.
They added that finding a buyer in current market conditions would be difficult. Petronas signed on for the project in 2012 through the acquisition of Canada's Progress Energy. That year LNG prices climbed to as high as $18.17 per million British thermal units (mmBtu) but have fallen to $5.75 per mmBtu since then.
If suspended, the project would be put on ice until gas prices begin to turn around and Petronas is confident of securing long-term contracts at reasonable prices, said the sources, who declined to be identified as the negotiations are not public.
Petronas has minority partners for the project in China, India, Japan and Brunei. (Reporting by A. Ananthalakshmi in KUALA LUMPUR and Oleg Vukmanovic in MILAN; Editing by Christian Schmollinger)