Federal Industry Minister James Moore has given the green light to a deal under which a subsidiary of Malaysia's Petronas will acquire the Montney gas holdings of Talisman Energy Inc. for $1.5 billion.
The properties in the Farrell Creek and Cypress areas of British Columbia are being sold to Progress Energy Canada Ltd., which Petronas acquired in 2012.
"I can confirm that I have approved Progress Energy Canada Ltd.'s application to acquire control of natural gas assets from Talisman Energy Inc.," Moore said in a statement issued Wednesday after reviewing the deal under the Investment Canada Act.
"Foreign investment transactions are reviewed on their merits based on the overall economic benefit for Canada," he said.
"In making my determination, I carefully considered the plans, undertakings and other information submitted by Progress Energy Canada Ltd. in light of the net benefit factors. . . . "
"To demonstrate that the transaction is likely to be of net benefit, Progress Energy Canada Ltd. has made significant commitments in the areas of Canadian participation, commercial operations, transparency, adherence to Canadian laws and practices, including free market principles and capital investments."
In November, Talisman Energy Inc. (TSX:TLM) — under pressure from investors to pare its holdings — signed the deal under which Progress will acquire more than 51,000 net hectares of land in areas of the Montney that Talisman owns through a 50-50 partnership with South Africa's Sasol.
The all-cash deal also includes interests in wells, pipelines and processing plants.
If the deal closes as planned and Sasol doesn't exercise its right of first refusal for the assets, the Malaysian and South African companies would be partners in the Montney.
Petronas has said it intends to invest up to $11 billion in a liquefied natural gas export terminal near Prince Rupert, B.C., where the natural gas will be chilled into a liquid state and sent to lucrative overseas markets by tanker.