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Petronas to advance its shale gas venture

Malaysia’s state oil company Petronas is undertaking a US$4.7 billion takeover of its Canadian joint-venture partner Progress Energy Resources to gain control of the vast shale gas reserves and advance plans to ship fuel to lucrative Asian markets.

The acquisition builds on the previous arrangement between the two parties to develop a portion of Progress Energy’s shale assets as well as on the intention to pursue the development of an integrated liquefied natural gas (LNG) export facility in western Canada.

Petronas plans to consolidate its Canadian business with that of Progress and retain all of the target company's staff. Petronas said Progress's Canadian upstream operations will remain based in Calgary, with a commercial office in Vancouver for LNG operations. Progress Energy said its board has unanimously determined that the deal is in the best interests of Progress and its shareholders.

The two companies, which have been studying the feasibility of a new liquefied gas terminal on Canada’s west coast as a way to secure higher prices for shale gas, also outlined plans to build a terminal in Prince Rupert, British Columbia. Petronas expects its definitive feasibility study for the Canadian shale gas venture to finish this August while its final investment decision to conclude by end-2014.