Petronas sells stake in LNG Canada to EIG-backed company

Liquefied natural gas company MidOcean Energy confirmed on Tuesday that it will acquire a 20% interest in Petronas’ Canadian subsidiaries, including a stake in LNG Canada.

Backed by energy investor EIG, MidOcean revealed the deal includes a 20% stake in the North Montney Upstream Joint Venture (NMJV), which holds Petronas’ upstream investments in Canada. MidOcean will also biu a 20% interest in the North Montney LNG Limited Partnership (NMLLP), which holds Petronas’ 25% stake in LNG Canada.

The deal will give MidOcean access to 700,000 tonnes per annum of LNG, “with potential to grow through LNG Canada phase two”, according to a MidOcean news release.

The companies did not reveal the value of their transaction, which is expected to close by the end of this year.

Petronas and Canada

Despite the sale, Petronas said the company “remains committed to its investments in Canada and this equity participation will not affect Petronas' existing control over NMJV and NMLLP”.

Petronas added that the deal “paves the way for potential future collaboration” with MidOcean.

“Petronas' partnership with MidOcean underscores the strength and long-term potential of the North Montney assets, while reinforcing Canada's position as a compelling destination for global energy investment and LNG industry growth,” a company statement said.

NMJV holds more than 800,000 gross acres of mineral rights with 53 trillion cubic feet of reserves and contingent resources, according to MidOcean.

RBC Capital Markets was MidOcean’s financial adviser for the deal. Latham & Watkins served as legal adviser.

Petronas’ financial adviser was Lambert Energy Advisory, and its legal adviser was Norton Rose Fulbright.