MidOcean to buy 20% stake in Petronas’ Canadian operations

MidOcean Energy, which is backed by EIG, said on September 30 that it had agreed to acquire a 20% interest in what it described as Petronas’ “key” businesses in Canada.

The deal includes a 20% stake in the North Montney Upstream Joint Venture (NMJV) and a 20% interest in the North Montney LNG Limited Partnership (NMLLP). The entities hold Petronas’ upstream assets and its 25% interest in the Shell-led LNG Canada project respectively.

MidOcean did not disclose the cost of the assets, but a source familiar with the matter told Reuters that it was a little more than $3bn.

The NMJV owns more than 800,000 gross acres (3,237 square km) of mineral rights, which are estimated to hold 53 trillion cubic feet (1.5 trillion cubic metres) of gas reserves and contingent resources, according to the announcement. The assets are among those being used to supply feed gas to the LNG Canada project, with the other partners in the terminal also producing gas in the region in order to supply their LNG operations.

LNG Canada began producing LNG earlier this year and is currently undergoing commissioning and start-up activities, with 10 cargoes shipped as of September 2.

MidOcean said that once its acquisition is completed, it will have the ability to secure an associated volume of 700,000 tonnes per year (tpy) of LNG from the project, with “potential to grow through LNG Canada Phase 2”. It will also hold a position “across the integrated value chain”, spanning upstream operations in the North Montney and downstream liquefaction and export through LNG Canada.

The transaction is anticipated to close in the fourth quarter of 2025.

“This investment is a clear reflection of our conviction in the future of LNG and its long-term role to help deliver global energy security and to underpin a practical and affordable energy transition,” MidOcean’s CEO, De la Rey Venter, stated.

Separately, Venter told Reuters this week that MidOcean was seeking to buy additional “price-advantaged” LNG assets in the Asia-Pacific region. The company’s existing LNG interests include participation in Gorgon LNG, Pluto LNG and QCLNG in Australia, as well as Peru LNG. In addition, MidOcean said in April that it had entered into a heads of agreement (HoA) paving the way for participation in the Lake Charles LNG project in the US.

MidOcean will have a portfolio of around 2.7mn tpy of LNG once the Petronas deal closes, according to Venter’s comments to Reuters.