Malaysian national oil company Petronas is selling a 10% stake in its proposed Pacific NorthWest LNG Ltd. (PNW LNG) export facility and the gas reserves underpinning the project to Indian Oil Corp. As part of the deal, Indian Oil will offtake 1.2 million tons of LNG – 10% of production capacity – from the liquefaction facility for 20 years. The offtake agreement will be used to partially supply a new regas facility in Tamil Nadu, India.

“The development of PNW LNG’s facility is progressing steadily with plans to reach a final investment decision by the end of 2014 and targeting first LNG exports in late 2018. The competitive front-end engineering and design (FEED) phase, involving three major engineering and construction consortia, is well advanced and PNW LNG is targeting the third quarter of 2014 for the receipt and evaluation of the engineering, procurement, construction and commissioning (EPCC) bids. The design is for two trains of approximately 6 MMTPA each with the option for a third train of the same size,” Indian Oil said in a statement.

“This transaction provides an excellent opportunity for IOCL to secure upstream participation in the highly prospective Montney play in Canada, along with securing long-term LNG supply for India’s growing gas requirements. IOCL will have access to assured LNG supply of 1.2 MMTPA for a minimum period of 20 years from the PNW LNG Integrated Project. This LNG will partly meet the requirement of IOCL’s upcoming 5 MMTPA Ennore re-gasification terminal in Tamil Nadu.” – Mr. R. S. Butola, Chairman of IOCL