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Pacific NorthWest is a $36-billion LNG project that would see liquefied natural gas shipped from Lelu Island,

Malaysia's Petronas plans to sell minority interests in its B.C. liquefied natural gas project to two Asian buyers, the latest move by the energy giant to stand out in the crowd of LNG players in Canada.

In diversifying the ownership structure, state-owned Petronas will strengthen its chances of turning the $36-billion project into reality because the new partners will be part of a team that agrees to produce natural gas in northeastern British Columbia and also purchase LNG that would be shipped from an export terminal on Lelu Island, near Prince Rupert in northwestern British Columbia.

There are a dozen plans for building LNG terminals on the West Coast, but industry experts say there is only room for three or four at most, with the B.C. projects facing stiff global competition to super-cool natural gas into liquid form and deliver the commodity by ship to Asia.

Petronas currently has an 87-per-cent stake in the Pacific NorthWest LNG project in British Columbia, while Japan Petroleum Exploration (Japex) holds 10 per cent and Petroleum Brunei owns 3 per cent. Japex and Petroleum Brunei have also agreed to sign long-term contracts to buy LNG in what the industry calls "off-take."

Shamsul Azhar Abbas, the chief executive officer at Petronas, said Tuesday that two new deals will bolster Pacific NorthWest. "I am pleased to announce that we have just finalized a further 25-per-cent equity participation from an Indian party and an established Asian LNG buyer," he said at an LNG conference in Singapore.

Petronas has been courting Indian Oil Corp. Ltd., hoping to sign up India's state-owned energy firm as both an investor and LNG buyer.

Indian Oil has been lined up to acquire a 10-per-cent stake in Pacific NorthWest and B.C. natural gas assets, while the Economic Times in India said Malaysia has held talks to sell a 15-per-cent interest to a Chinese company. Mr. Shamsul, however, declined to elaborate on the details until the deals are signed in March.

By the end of March, Petronas is set to have four partners on its roster with interests totalling 38 per cent, including the two newest co-owners. The Malaysians have said they will maintain majority control of both Pacific NorthWest and Progress Energy Canada, which has natural gas properties in northeastern British Columbia. Petronas bought Progress for $5.2-billion in 2012.

Mr. Shamsul said Petronas is in advanced negotiations with other prospective co-owners for the remaining 11.9 per cent up for grabs on the ownership team, but he is "willing to consider other potential buyers at this stage."

Pacific NorthWest spokesman Spencer Sproule had no comment on Petronas's moves to spread the risk among more co-owners, but he said the B.C. LNG project remains on track to make a final investment decision by the end of 2014.

Within weeks, Pacific NorthWest will file impact statements with the Canadian Environmental Assessment Agency and also an application with B.C. Environmental Agency Office.

Pacific NorthWest, which has held a half-dozen open houses to gather feedback from residents in northwestern British Columbia since the fall of 2012, will be conducting an information session this spring in Prince Rupert and another in nearby Port Edward.

The B.C. Environmental Agency Office recently approved the application information requirements for Pacific NorthWest and the Shell Canada Ltd.-led LNG Canada project, part of the regulatory process toward applying in future for an environmental assessment certificate.

The B.C. government notes that Australia and the United States are major rivals in the global LNG race.

"A rising tide of U.S. LNG is on the way," RBC Dominion Securities Inc. analyst Greg Pardy said in a research note. Cheniere Energy Inc.'s Sabine Pass LNG project in Louisiana is under construction, slated to start shipping LNG late next year, while other American projects are awaiting approval from the U.S. Federal Energy Regulatory Commission.

Several U.S. LNG export proposals have competitive advantages because the projects were already designed to import LNG, Mr. Pardy said.

Follow Brent Jang on Twitter: @brentcjangOpens in a new window

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