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(Toronto Globe and Mail; June 28) -- Malaysia's state-owned oil and gas company is making a multibillion-dollar bet on Canada's vision to export natural gas to Asia. Petronas said June 28 it struck a deal to acquire Calgary's Progress Energy Resources Corp. for $5.5 billion. Petronas also chose Prince Rupert, B.C., as home of its planned LNG export terminal. Petronas and Progress Energy hope to start shipping gas in 2018.

International energy companies have been spending billions on remote natural gas plays in Alberta and British Columbia, with plans to sell the gas in Asia where prices are substantially stronger. With a supply glut of gas keeping prices depressed in North America, foreign companies armed with big cash reserves are being welcomed by Canadian energy firms.

"Our asset base requires extensive capital to develop its large potential and ultimately access international LNG markets," Progress CEO Michael Culbert said in a statement. "Petronas offers the size and scale that will enable our company to continue to grow and not be limited by the same cash-flow challenges faced by many producers in the North American natural gas market today." The Calgary-based company operates in the Deep Basin in northwest Alberta and the Foothills zone in northeast British Columbia.

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