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Malaysia’s Petronas outlines LNG jackpot
Gary Park For Petroleum News
Malaysia’s state-owned Petronas expects to invest C$36 billion over 30 years on all aspects of British Columbia’s Pacific NorthWest LNG project being developed by its Canadian unit, Progress Energy Resources, said Malaysian Prime Minister Najib Razak.
At a joint news conference with his Canadian counterpart Stephen Harper, ahead of the annual Asia-Pacific Economic Cooperation summit in Bali, Razak said the spending estimate represents the “largest foreign direct investment in Canada” by any country.
“We believe this project will be mutually beneficial because it will open up Canadian energy to new markets, principally East Asia,” he said.
Harper delivered a more muted response, saying his government views the Petronas investment “very positively” and is “very excited” about the possibility of further investment by the giant Malaysian company.
Many obstacles That response likely reflected Harper’s awareness of how many obstacles have to be overcome before the planned Pacific NorthWest LNG project can come onstream in 2019.
He also offered a cautionary note, saying government foreign investment policy “involves the use of discretion when it comes to state-owned enterprises.”
Razak said he is confident that not only the Harper government, but future Canadian administrations, will support Petronas’ Canadian investments.
The venture, which includes Japan Petroleum Exploration as a 10 percent partner in the integrated shale gas development and LNG liquefaction terminal, has yet to receive an export permit from Canada’s National Energy Board and environmental reviews by the Canadian and British Columbia governments, all pointing to a final investment decision by late 2014.
In addition, it is not yet clear whether off-take customers have been lined up by Petronas for the anticipated 12 million metric tons per year of LNG.
The total investment package includes the almost C$6 billion already spent by Petronas to acquire Progress Energy Canada and its gas holdings in the North Montney shale field of British Columbia; C$5 billion for a pipeline to be built by TransCanada; C$11 billion for the LNG terminal near Prince Rupert; and the balance on gas development and processing facilities in British Columbia.
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