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By Reuters
July 14 (Reuters) – LNG Canada said on Tuesday five First Nations will have an equity option to invest up to C$1 billion ($710.78 million) to acquire a storage tank planned to be built in a proposed expansion of the country’s first major LNG export facility.
First Nations, Canada’s indigenous peoples groups, have been buying stakes in the country’s energy projects seeking economic benefits from projects built on their land, amid rising capital requirements for companies in the sector.
- Under the agreement, MNT Investments — a limited partnership comprising the economic development organizations of the five First Nations — would have the option to acquire a majority stake in a special purpose entity that would purchase the planned storage tank.
- The entity would finance the 225,000-cubic-metre tank and lease it back to LNG Canada for the operational life of the project, the company said.
- LNG Canada will continue to operate and maintain the facility and associated infrastructure, it added.
- Shell-led LNG Canada is the first LNG export facility on North America’s West Coast, giving it direct access to Asian markets.
- The tank would be among the largest in the world and is a core component of the expansion, which could add two LNG trains and raise total capacity to up to 30 million tonnes per annum.
- The arrangement would also give the First Nations direct ownership in a key component of one of Canada’s largest LNG developments, according to the company.
- The deal is conditional on approval of LNG Canada’s joint venture partners for its proposed Phase 2 expansion, with a final investment decision targeted by the end of 2026.
- LNG Canada is a joint venture between Shell, Malaysia’s Petronas (PETGL.UL), PetroChina, Japan’s Mitsubishi Corp and South Korea’s KOGAS.
($1 = 1.4069 Canadian dollars)
Reporting by Varun Sahay in Bengaluru; Editing by Jonathan Ananda
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