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Malaysia’s state-owned Petronas will buy a 25-per-cent stake in a B.C. liquefied natural project led by Royal Dutch Shell PLC, a move designed to strengthen the $40-billion proposal and bolster Canadian energy exports.

Petronas will become the second-largest partner in LNG Canada after striking a combination of deals with Shell, PetroChina and South Korea’s Kogas.

The entry of Petronas into the Shell-led consortium comes less than a year after the Malaysian energy giant cancelled its Pacific NorthWest LNG joint venture near Prince Rupert, B.C. The LNG Canada terminal is to be located in northern B.C. community of Kitimat, with exports of the fuel shipped to Asia.

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“As one of the world’s largest LNG producers, Petronas looks forward to adding value to this venture through our long-term expertise and experience across the LNG value chain,” Petronas chief executive Wan Zulkiflee Wan Ariffin said in a statement on Thursday from Kuala Lumpur.

Subject to the transactions closing this summer, Shell will own 40 per cent of LNG Canada and Petronas will pick up 25 per cent, with the remaining partners being PetroChina (15 per cent), Japan’s Mitsubishi Corp. (15 per cent) and Kogas (5 per cent).

While Shell touted Thursday’s announcement as a major step forward, the Anglo-Dutch giant cautioned that the soon-to-be five co-owners have yet to make a final investment decision. “The timing and outcome of an FID will be decided by joint venture participants based on global energy markets, and the overall competitiveness and affordability of the project,” Shell said in a news release from London.

Currently, the consortium has four partners: Shell (50 per cent), PetroChina (20 per cent), Mitsubishi (15 per cent) and Kogas (15 per cent). The new ownership structure will result in Shell, PetroChina and Kogas reducing their respective stakes while Mitsubishi stays at 15 per cent.

Petronas said it is keen to join LNG Canada because the Kitimat project will provide a much-needed export outlet for its natural gas reserves in the North Montney region of northeast B.C., where Malaysian subsidiary Progress Energy Canada Ltd. operates.

“Having an equity position in this project will enhance Petronas’s business intent to develop its world-class natural gas resource in the North Montney,” Petronas said.

In British Columbia, however, energy projects are far from certain – a fact underscored by opposition from environmental groups and many First Nations to the Trans Mountain oil pipeline expansion from the Edmonton area to Burrard Inlet in the Port of Vancouver.

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The BC NDP minority government opposes Trans Mountain’s expansion but supports LNG Canada.

In total, LNG Canada’s construction costs would be up to $40-billion, including the Kitimat export terminal and TransCanada Corp.’s proposed $4.7-billion Coastal GasLink pipeline from northeastern British Columbia to Kitimat.

TransCanada said last week that it has won support from 19 of 20 elected First Nations bands along the company’s Coastal GasLink pipeline route that would feed LNG Canada’s planned LNG terminal.

The terminal site is on the Haisla Nation’s traditional territory in Kitimat. The Haisla Nation Council, which backs LNG Canada, has yet to sign a final commercial agreement to support the pipeline project.

Over and above the 20 elected bands, Coastal GasLink is also consulting with the Office of the Wet’suwet’en, which includes hereditary chiefs who oppose the pipeline route.

Shell believes it would be helping and not harming the planet, saying Asian economies stand to benefit from importing Canadian LNG and scaling back on other global commodities such as coal.

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“If constructed, LNG Canada participants plan to ship natural gas, including from B.C.’s vast reserves, to various markets where the imported gas could displace more carbon-intensive energy sources, helping to reduce greenhouse-gas emissions,” Shell said in a statement accompanying its announcement that Petronas will acquire a minority interest.

LNG Canada also faces uncertainty over federal tariffs. The Shell-led group has asked the federal Finance Department to exempt the B.C. project from anti-dumping duties of up to 45.8 per cent on imports of fabricated industrial steel components, notably from China and South Korea.

LNG Canada CEO Andy Calitz said earlier this month that he is optimistic about the consortium being in a position to start construction by the end of this year. In July, 2016, LNG Canada announced a delay in making a final decision.

But Mr. Calitz pointed to steady progress over the past 22 months.

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