SINGAPORE (Reuters) - Malaysia’s Petronas has agreed to sell a 25 percent stake in its Canadian shale gas assets to an Indian company and an Asian gas buyer, the state firm’s president and chief executive, Shamsul Azhar Abbas, said on Tuesday.
Petronas is looking to share some of the costs of bringing liquefied natural gas (LNG) from North America to energy-hungry Asia. Indian state oil and gas companies want to expand their portfolios of exploration and producing assets.
The Malaysian firm has already sold a 10 percent stake in Progress Energy Resources Corp, and the integrated shale gas development and LNG project, to Japan Petroleum Exploration (1662.T) and another 3 percent to Petroleum Brunei.
“I am pleased to announce that we have just finalised a further 25 percent equity participation from an Indian party and an established Asian LNG buyer,” Shamsul said at the LNG Supplies for Asian Markets conference.
He did not name the Indian company or the Asian LNG buyer, and wouldn’t disclose the price to be paid for the full stake. Sources had said earlier that Petronas was in talks with state-run Indian Oil Corp (IOC.NS) on a 10 percent stake.
The Indian cabinet earlier this month approved IOC’s bid to buy a 10 percent stake in Progress Energy Resources for C$1 billion, a government source said.
Other sources said the Indian company this month secured a $900 million one-year bridge loan from a group of banks to back the Canadian purchase.
An IOC official acknowledged his firm would soon sign a deal and is in the process of raising fund for the acquisition.
“Now it is a matter of days,” said the IOC source when asked when the deal with Petronas could be signed.
Petronas CEO Shamsul said on the conference sidelines the buyers can be announced only next week, when the deal will be signed.
Petronas has previously said it wants to sell up to 50 percent of the Canadian project, which means it now has another 12 percent to offload.
“We are in advanced talks with other buyers for the remaining 12 percent,” Shamsul said, without providing any further details.
Reuters has previously reported, citing sources, that Petronas was also in talks with China firms as well.
Petronas, which has been expanding abroad to shore up future earnings as output slows at home, bought Canada’s Progress Energy Resources in 2012 in a deal worth around $5 billion that gave it shale gas properties in northeastern British Columbia.
Development of the shale gas resources and an LNG facility of 12 million tonnes per year have been pegged at $35 billion.
Shamsul declined to comment on a media report saying the final investment decision (FID) on a refinery and petrochemical project in Johor would be delayed further.
Petronas last year announced a second delay to the project in southern Johor state to 2018, and said a final investment decision would be taken in the first quarter of 2014.
A delay to the $19 billion petrochemicals complex could deal a blow to Malaysia’s economy as well as local oil and gas services firms hoping for work on the massive complex.
Additional reporting by Niluksi Koswanage in KUALA LUMPUR and Nidhi Verma in NEW DELHI; Editing by Muralikumar Anantharaman and Tom Hogue