Petronas threatens to pull out of $10B LNG project
Petronas CEO Shamsul Abbas cites political stalling, potential new taxes and "lack of appropriate incentives"
TORONTO—Malaysian state-owned energy company Petronas is threatening to pull out of a liquefied natural gas project on the north coast of British Columbia, the Financial Times reported.
The newspaper said Petronas chief executive Shamsul Abbas was ready to call off the $10-billion project amid a delayed regulatory approval process, plans by the provincial government to impose an LNG tax and a “lack of appropriate incentives.”
“Rather than ensuring the development of the LNG industry through appropriate incentives and assurance of legal and fiscal stability, the Canadian landscape of LNG development is now one of uncertainty, delay and short vision,” Abbas told the Financial Times.
Abbas is expected to visit Canada later this week.
Petronas is leading the Pacific Northwest LNG project near Prince Rupert, B.C. The company holds a 62 per cent stake in the project.
Its partners include China’s Sinopec with a 15 per cent stake, Japex Montney with 10 per cent, Indian Oil Corp. Ltd. with 10 per cent and PetroleumBrunei with three per cent.
Pacific Northwest LNG is one of several projects that various companies have been considering as a way to export natural gas by tanker from the West coast.
The B.C. government proposed earlier this year a two-tier LNG tax on income from liquefaction of natural gas at facilities in B.C.
Petronas bought Progress Energy Corp. in 2012 in a deal that was closely scrutinized by Ottawa.