Petronas and its partners have decided not to proceed with the Pacific NorthWest LNG project at Port Edward in British Columbia, Canada.
The Malaysian state-controlled energy giant has pulled the plug on the proposed $11.4-billion project.
Petronas planned to build a LNG processing plant on Lelu Island that would have shipped 19 million tonnes a year of liquefied gas to markets in Asia, while pumping five million tonnes of carbon dioxide annually into the atmosphere.
According to a release by the company, the decision was made after a careful and total review of the project amid changes in market conditions.
“We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry has led us to this decision.” said Anuar Taib, Petronas’ executive vice president and chief executive officer (Upstream)
A separate release by Pacific NorthWest LNG thanked regional governments and first nations leaders for their support.
“Thank you to the communities of Port Edward and Prince Rupert for welcoming Pacific NorthWest LNG and hosting our local outreach offices. In addition, thank you to all the communities in northwestern BC who expressed an interest in the project and took the time to work with us,” the release said.
“We would also like to recognize the time and efforts of all the area First Nations, including the Lax Kwa’laams First Nation, Metlakatla First Nation, Kitsumkalum First Nation, Gitxaala First Nation and Gitga’at First Nation, and all of the other nations residing in the Prince Rupert area who have kindly provided us feedback.”
Michelle Mungall, minister of energy, mines and petroleum, in a press conference, reiterated Petronas’ stated reason for the decision.
“The company was very clear,” she said, “this was a decision they are making because of the economic challenges in the global energy marketplace.” She added that the project, as proposed was uneconomical to move forward and that the government respected the companies decision.
“Our government is committed to working with the LNG industry to ensure that we are competitive,” she said, “and as we told British Columbians, we are also committed to working with the LNG sector so that it guarantees jobs and training opportunities for British Columbians, the province received a fair rate of return for our resources, First Nations are meaningful partners and development protects air land and water and lives up to our climate change commitment.”
Pacific NorthWest LNG will complete business commitments by the end of September. The Prince Rupert and Port Edward offices are scheduled to be closed effective August 25, 2017.
More to come