* Shell to hold biggest stake at 40 pct
* Deal comes year after Petronas cancelled own terminal(Adds comments from Petronas President, analyst and backgroundon Petronas' assets in Canada)
KUALA LUMPUR, May 31 (Reuters) - Malaysia's state-owned oiland gas company Petroliam Nasional Bhd said onThursday it is buying a 25 percent stake in a Canadian liquefiednatural gas (LNG) export project, nearly a year after cancellingits own planned terminal.
The company, known as Petronas, scrapped plans to build a$36 billion ($28 billion) LNG export terminal in BritishColumbia last year over concerns of a glut in the market thatled to depressed fuel prices.
But surprisingly strong demand from China, South Korea andIndia has erased those concerns, and market sentiment hasrecovered.
Petronas said in a statement that it would buy an equitystake in LNG Canada, an export project led by Royal Dutch Shelllocated in Kitimat, British Columbia. The purchase isexpected to close in the next few months, the company said.
Petronas did not give a value for the acquisition.
"We believe this to be a positive development for Petronas,"said Prasanth Kakaraparthi senior analyst at Wood Mackenzie.
"We expect the global LNG market to tighten post 2022 andthis bodes well for the project," he added.
The C$40 billion LNG Canada project will consist of two LNGproduction facilities, known as trains, that are expected toexport a combined 13 million tonnes per year of LNG.
Petronas is joining as Shell and its partners prepare for afinal decision to go ahead with the project, which would be thefirst large-scale LNG plant constructed in several years.
Shell will continue to be the biggest owner in LNG Canada,holding a 40 percent stake. Other partners include PetroChina, Mitsubishi's Diamond LNG andKorea Gas.
LONG TERM
Since scrapping earlier plans, Petronas had been looking forways to generate revenue from its assets in that region.
Petronas’ North Montney assets in British Columbia are richin natural gas. Petronas’ and its North Montney joint venturepartners are one of the largest natural gas resource owners inCanada with over 52 Tcf of reserves and contingent resources, itsaid.
An equity stake in LNG Canada will enhance the company'saims to develop natural gas resource in the North Montneythrough its subsidiary, Progress Energy Canada Ltd.
"Petronas is in Canada for the long-term and we areexploring a number of business opportunities that will allow usto increase our production and accelerate the monetisation ofour world-class resources in the North Montney," President andGroup Chief Executive Officer Tan Sri Wan Zulkiflee Wan Ariffinsaid in the statement.
"LNG is just one of those opportunities,” he said.
In March, Petronas said it was one of the producers involvedin TransCanada's proposal to expand a pipeline systemthat would open up more markets for its gas produced in WesternCanada.
($1 = 1.2839 Canadian dollars)(Reporting by A.Ananthalakshmi; Editing by Tom Hogue and JaneMerriman)
