CALGARY - Malaysia's Petronas has increased its bid for Progress Energy Resources Corp. in order to trump a rival offer.
Petronas is now paying $22 per share to acquire the Calgary-based natural gas producer (TSX:PRQ), up from the $20.45 it announced it was offering a month ago.
"The increase in the consideration resulted from Progress having received an unsolicited proposal from a third party," Progress said in a release, without identifying the suitor.
"The board of directors of Progress has unanimously determined that the amended arrangement is in the best interests of Progress and is fair to shareholders and debenture holders."
Investors are set to vote on the deal on August 28.
Progress shares soared almost 14 per cent to close at $22.85 on the Toronto Stock Exchange Friday.
Petronas and Progress were partners in British Columbia's Montney region before the acquisition was announced. The two had been studying potentially building a liquefied natural gas terminal on the West Coast.
The companies announced along with the deal last month that they've selected Prince Rupert, B.C., for the location of its proposed LNG terminal.
Natural gas prices in North America have been below US$3 for a long time now, making it difficult for many producers to turn a profit. But in Asia, where countries are clamouring for supplies to feed their booming economies, prices can be three to five times higher.
Progress and Petronas have not been the only ones exploring the option of shipping LNG off Canada's West Coast.
In May, Royal Dutch Shell PLC and three Asian partners announced plans to build a liquefied natural gas export terminal in Kitimat, B.C.
The Anglo-Dutch energy giant will have a 40 per cent stake in the project, called LNG Canada. PetroChina, Mitsubishi Corp. and Korea Gas Corp. will each hold a 20 per cent interest.
Encana Corp. (TSX:ECA) and U.S. partners Apache Corp. and EOG Resources plan to start up their Kitimat LNG plant in 2015, with an initial capacity of five million tonnes a year.
Another proposal called BC LNG, owned by the Haisla First Nation and Houston-based LNG Partners, expects its first shipment in 2014.
Talisman Energy Inc. (TSX:TLM), Nexen Inc. (TSX:NXY) and Imperial Oil Ltd. (TSX:IMO) are in the early stages of weighing LNG projects of their own.