While the deal, announced Thursday, marks Petronas' first investment in Canada, it follows a series of Canadian natural gas acquisitions by Asian giants PetroChina, Korea Gas Corp., Mitsubishi Corp., along with South Africa's Sasol Ltd., that together are worth nearly $9 billion, The Globe and Mail newspaper reports.
The fields, in the North Montney in British Columbia, represent one of the most lucrative of the new shale gas plays in North America, containing an estimated 15 trillion cubic feet of natural gas. That's enough to supply all of Canada's needs for more than four years. So far, the Montney has been drilled five times.
From 10 million cubic feet a day last year, Progress now produces 75 million cubic feet a day from the Montney, representing a quarter of the company's output.
Under the deal, Progress would remain in control of the resource as operator of the Montney joint venture.
Petronas, in a statement said it "views the acquisition as a highly attractive opportunity, paving its entry into the North American shale gas industry while at the same time further strengthening its position as a leading global LNG player."
Progress and Petronas have also pledged to study the potential for building a natural gas export terminal on British Columbia's West Coast with the aim of exporting natural gas to Asia on tankers in liquid form. Petronas would have an 80 percent interest in the facility.
Three other such facilities have been proposed for the region but none have been approved.
"Canada is poised to take a larger role on the world's energy stage," Michael Culbert, president and chief executive officer of Progress said in a statement. "Developing new export options for Canadian natural gas producers is a logical step in connecting our vast resources with growing Asian demand for environmentally responsible energy sources like natural gas."
Petronas, the world's second-largest LNG exporter, has major stakes in a number of Australian export terminals.
Chris Theal, president and chief executive officer of Kootenay Capital Management, a Calgary energy-focused hedge fund, told Canada's Financial Post that Asian companies are looking beyond Australian LNG exporters "overheated" with so many projects.
"The natural gas gold rush in Australia is just about done," and it's "very possible" it is shifting to Canada, Progress Chairman Dave Johnson told The Globe and Mail.