MidOcean Buys Into Petronas’s LNG Canada Stake in $3B Deal

Malaz Madani

Last updated 1-10-2025

3 min

MidOcean has agreed to buy 20% of Petronas’s stake in LNG Canada.

LNG Canada exports began in June, enhancing access to Asia's growing energy market.

Construction costs for the project were estimated at around C$40 billion.

Saudi Aramco’s involvement reflects its interest in LNG as a hedge against oil volatility.

The deal resembles startups’ challenges: high costs, uncertain returns, but potential for growth.

MidOcean, an LNG-focused firm backed by EIG and Saudi Aramco, has struck a deal to acquire a fifth of Petronas’s stake in LNG Canada, as well as a slice of the Malaysian energy giant’s upstream assets in Canada’s Montney shale gas region. The upstream fields feed directly into LNG Canada, making the tie-up a neat strategic fit. While neither side disclosed the price, sources familiar with the talks pegged the transaction at just over $3 billion. Not exactly pocket change.

LNG Canada only shipped its first cargo in June, marking the first direct line for liquefied gas exports from North America’s Pacific coast to Asia’s enormous energy market. That timing is spot on, given how Asian demand for LNG has been on the rise, even as global competition stiffens.

Thanks to the fact Canadian natural gas usually trades at a consistent discount compared to the U.S. Henry Hub benchmark—and, amazingly, dipped into negative territory in the past week—the project has a built-in cost edge. Once fully running, LNG Canada aims to deliver 14 million tonnes annually, with owners already exploring plans to double that.

The venture is a heavyweight mix: Shell controls 40%, PetroChina and Mitsubishi hold 15% each, Korean Gas Corporation has 5%, and Petronas maintains 25% (with MidOcean now buying a slice of this). Construction costs were estimated by Canadian officials at around C$40 billion ($29 billion). That’s a hefty bill, but clearly one the partners expect to pay back over the long haul.

Petronas, for its part, framed the deal as opening doors to future collaboration with MidOcean, though it kept quiet on numbers. MidOcean is led by former Shell executive De la Rey Venter, who has hinted the company is seeking more price-advantaged LNG assets across Asia-Pacific. Already holding interests in projects in Australia and Peru, MidOcean is also eyeing the Lake Charles LNG development in the Gulf of Mexico.

Saudi Aramco’s growing involvement isn’t a huge suprise—I reckon the oil giant sees LNG as the next logical frontier, a cushion against future oil market volatility. And believe it or not, Aramco and Mitsubishi have both bought into MidOcean over the past few years, adding to its clout.

For readers at Arageek, what strikes me is how this kind of long-term positioning in the energy sector resembles what ambitious startups in our region face: high entry costs, uncertain future returns, but huge potential scale if things click. I recall a founder in Amman once telling me that attracting the right strategic investor feels a bit like striking gold—it’s the difference between treading water and breaking into the big league. MidOcean’s play here feels quite similar, only on a global and multi-billion-dollar scale.

At the end of the day, LNG Canada is shaping up to be a prize asset for anyone involved. The project already has momentum, and in this business, timing is half the battle. It might be a bit of a faff to get right, but if the owners pull off their expansion plans, they’ll be chuffed to bits. And, for Aramco, it’s another brick in the wall of its emerging LNG empire—something the energy world will be watching closely, no doubt.

(And yes, forgive the small spelling slip earlier… typing too fast, as usual.)

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