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PetroChina may reduce its holding gradually through several smaller transactions
PetroChina Co. is weighing options to sell part of its shares in LNG Canada Development Inc. to help fund a planned expansion, according to people familiar with the matter.
The Chinese state-owned energy giant is working with an adviser to help gauge interest for its 15 per cent stake, which could be worth a few billion dollars, the people said, who asked not to be identified because the deliberations are private. PetroChina may reduce its holding gradually through several smaller transactions, they added.
The discussions are at an early stage and no final decision has been made, the people said. PetroChina and LNG Canada didn’t immediately respond to requests for comment.
China’s largest oil and gas producer plans to use proceeds from the sale to help finance the facility’s second phase, the people said. The expansion, which would double the plant’s output, is gaining urgency as the war involving Iran and the closure of the Strait of Hormuz — a key route for about a fifth of global LNG shipments — leave the market facing a supply crunch.
The LNG Canada project has provided an important alternative for China after the Middle East conflict disrupted deliveries from Qatar, which supplied nearly 30 per cent of Chinese LNG imports last year. Cargoes from Canada have partly offset that shortfall, ship-tracking data show.
The first phase of the project’s facility in Kitimat, British Columbia, began exports last year, kicking off a wave of new global supply. Its partners — which include Shell Plc, Mitsubishi Corp., Petroliam Nasional Bhd. and Korea Gas Corp. — agreed to invest in the US$31 billion project in 2018.
“We are not in a position to comment on any process that may be undertaken by our joint venture participants,” Sarah Norman, a spokesperson for LNG Canada, said by email.
Chinese companies are also seeking more LNG from Canada and other producers to reduce their reliance on Persian Gulf supplies and guard against future disruptions, Bloomberg reported earlier this month.
With assistance from Stephen Stapczynski, Ruth Liao and Ocean Hou
Bloomberg.com
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