State-owned refiner Indian Oil Corporation is set to buy a 10 per cent stake in Petronas’s shale gas asset and LNG project in British Columbia, Canada, for around $900 million.

The acquisition of the stake in Progress Energy Resources Corp for Canadian $1 billion ($900 million) marks IOC’s maiden entry into North America.

The Cabinet Committee on Economic Affairs had earlier cleared IOC’s bid to acquire the stake of the Malaysian company as part of the country’s strategy to acquire foreign oil and gas assets and ensure availability for domestic use.

“I am pleased to announce that we have just finalised a further 25 per cent equity participation from an Indian party and an established Asian LNG buyer,” Petronas president and CEO Shamsul Azhar Abbas said at an LNG conference in Singapore, according to reports.

Though Abbas did not disclose the identity of the buyers, sources said IOC was picking up a 10 per cent stake and the remaining 15 per cent might go to a Chinese company. Officials in IOC confirmed that the deal would be signed in a few days.

Malaysian oil major Petronas had acquired Progress Energy last year for about Canadian $5.2 billion to get the Altares, Lily and Kahta shale gas assets in northeastern British Columbia.

Progress Energy has shale gas assets in northeastern British Columbia and its sister concern — Pacific NorthWest LNG — is planning to build an LNG export facility on the west coast.

Petronas needs money to fund its proposed $20 billion Pacific Northwest LNG project, which will liquefy and export natural gas produced in its gas fields in the Montney region and northwest Alberta to energy starving Asian nations.

IOC’s 10 per cent will come with an offtake agreement for the Indian energy company. IOC is looking to expand its portfolio of exploration and producing assets, while Petronas wants some of its costs to be shared.

IOC, which had previously ventured into overseas oil and gas exploration and production with state-owned explorer OIL India Ltd, is currently talking to Petronas alone. There has been no decision so far on taking OIL on board for the acquisition.