Petronas CEO says Pacific NorthWest LNG review “still ongoing”

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HOUSTON, T.X. — The CEO of Petronas is still not giving a timeline on a possible final investment decision for the proposed Pacific NorthWest LNG project, as the market for large-scale natural gas liquefaction facilities continues to weaken.

According to an article in The Financial Post, Petronas CEO Datuk Wan Zulkiflee Wan Ariffin said that the company is “doing a total review of the project, and taking into account all the cost optimization options. That is still ongoing.”

The Malaysian state owned company is the largest stakeholder in the proposed LNG export facility near Prince Rupert. Petronas has delayed a final investment decision on the proposal for a number of years due to both a drop in LNG prices, and environmental opposition.

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Wan Zulkiflee told The Financial Post on Wednesday that the company still considers its LNG efforts in Canada to be a worthwhile effort, as Petronas has a large number of investments in Northeast B.C. “We’ve got huge resources there, and that’s something we’re determined to monetize,” he said.

Natural gas producers in the Montney formation have been seeing increased competition in recent years due to a spike in natural gas production in the United States. The excess supply has been made worse by a shortage of pipelines in Northern B.C., as companies have been racing to expand capacity.

Late last year, proponents behind the $1.6-billion Woodfibre LNG terminal announced they would move ahead with the project near Squamish. However, none of the large-scale LNG proposals have moved forward after facilities that were built in the U.S. and Australia led to a global glut of the liquified gas.

Companies around the world have deferred projects as a result. Wan Zulkiflee said that only about six million tons per annum of LNG capacity received a final investment decision in 2016, while another 60 was deferred — something he says that he is “concerned” about.

Story courtesy The Financial Post: http://business.financialpost.com/news/energy/petronas-review-of-canadian-lng-project-ongoing-but-ceo-keen-to-monetize-montney-natural-gas-asset.

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