Petronas wants LNG approval

Malaysia’s state-owned Petronas is resolutely clinging to hopes of early approval from the Canadian government of its Pacific NorthWest LNG project in British Columbia.

The upbeat message came earlier in September from Arif Bin Mahmood, Petronas’ downstream chief executive officer and group executive vice-president.

He said the company remains “committed” to the US$35 billion venture so long as the conditions of approval meet its expectations.

Petronas has been waiting for more than three years to receive a green light, during which period a global LNG over-supply along with lower natural gas and oil prices and compounded by growing opposition from First Nations and environmentalists, have spread an economic cloud over the project.

But, in the midst of considerable gloom, TransCanada has made headway, signing project agreements with 13 First Nations along the route of its C$4.8 billion Coastal GasLink pipeline to deliver gas feedstock from northeastern British Columbia to the planned Pacific NorthWest liquefaction and tanker facility at Kitimat.

With anxiety increasing, there were reports earlier this year that Petronas was ready to pull the plug unless it gained federal government approval by the end of March.

That speculation was based on claims that Petronas had issued an ultimatum to the Canadian government that it would walk away if required to meet additional environmental requirements.

The report was dismissed as “false” by Pacific NorthWest, while Rich Coleman, the British Columbia cabinet minister responsible for LNG, said it was “business as usual” for the proponent.

Meanwhile, Petronas said it is on track to bring its US$27 billion refining and petrochemical complex in southern Malaysia into service in 2019, despite earmarking heavy company-wide capital spending cuts to contend with low oil prices.

Mahmood said more than half of the complex will be completed by the end of 2016 as it proceeds with plans to refine 300,000 barrels per day of crude and increase its chemical output by 7.7 million metric tons a year.

In explaining the thinking behind the project, he said southern Asia has 4 billion people, while the number of middle-class income earners is rising.

- GARY PARK