Petronas signals long-term LNG commitment in Canada
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas)'s continued presence in Canada highlights its long-term commitment to natural gas and liquefied natural gas (LNG) as a core pillar of its energy transition strategy.
According to Tradeview Capital fund manager Neoh Jia Man, natural gas remains a vital transitional fuel for Petronas, which is expected to sustain investments in LNG and related infrastructure.
However, Neoh said Petronas may eventually divest its Canadian upstream operations while retaining its stake in LNG Canada, a move that would still reflect its strategic focus on LNG and align with its long-term plans in the region.
"In our view, Canada's low-cost natural gas and crude oil resources remain attractive to most energy companies.
"However, cultural differences and a lack of local operational expertise may present execution challenges for some Asian energy firms," he told Business Times.
As such, Neoh said that over the long term, as Petronas shifts away from traditional fossil fuels, a full exit from Canada remains possible.
He noted that this is likely unless the company identifies new opportunities that align with its evolving portfolio in renewable energy, hydrogen, green mobility, speciality chemicals, carbon capture and storage, or bio-based products.
Petronas has denied reports suggesting it intends to exit Canada, reaffirming its strong, long-term commitment to the country's energy sector.
In a brief statement issued on Wednesday, the Malaysian state-owned energy firm clarified that claims of its withdrawal from Canada are incorrect.
This statement follows a Bloomberg report on Tuesday indicating that Petronas is evaluating strategic options for its Canadian subsidiary, formerly Progress Energy Resources Corp.
According to sources cited by Bloomberg, Petronas is working with a financial advisor and gauging interest from potential buyers.
The Canadian business is estimated to be worth between US$6 billion and US$7 billion.
Reports suggest that Petronas is considering either a full or partial sale, with the possibility of selling only a minority stake depending on investor interest.
Meanwhile, Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan noted that Petronas has a history of reassessing its LNG investments in Canada based on prevailing market conditions.
He pointed out that back in 2017, Petronas withdrew from the Pacific Northwest LNG project following a period of low LNG prices, while simultaneously focusing on the Rapid LNG project in Pengerang, Malaysia.
Azmi suggested that this approach reflects a strategic prioritisation rather than a complete withdrawal from Canadian projects.
Another industry expert said Petronas' ongoing commitment to Canada demonstrates confidence in the value of Canadian LNG assets and reflects a balanced strategy to diversify its portfolio across stable markets.
He noted that Canada offers political stability, strong regulatory frameworks, and access to the Pacific market, making it an attractive and reliable destination for Asian energy investments, especially as demand in Asia continues to grow.
"While companies routinely review their portfolios, Petronas' current stance suggests it sees continued value in Canada.
"However, any future decisions to exit from Canada would likely be driven by long-term market trends," he said.
Petronas entered Canada in 2012 by acquiring Progress Energy for US$5.3 billion, securing shale gas assets in northeastern British Columbia.
Currently, Petronas operates the North Montney Joint Venture (NMJV) and holds a 25 per cent share in LNG Canada, a significant US$40 billion liquefied natural gas project nearing completion in Kitimat, British Columbia.
Other LNG Canada partners include Shell plc, PetroChina, Mitsubishi Corp., and Korea Gas Corp.
The LNG facility is set to be one of the lowest in carbon emissions globally and is preparing to ship its first cargo later this year.
Petronas reaffirmed its commitment to supplying lower-carbon, reliable Canadian liquefied natural gas to global markets for the long term.
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