Petronas and its partners in the Pacific Northwest LNG project have decided to defer the project's $36 billion final investment decision, citing declining oil prices.
According to a release by Petronas, costs associated with the pipeline and LNG facility remain challenging and must be reduced further before a positive decision can be undertaken. At the same time, Pacific NorthWest LNG will continue work to secure necessary regulatory and other approvals from Ottawa.
"Petronas hopes that all outstanding factors can be resolved as soon as possible to enable the Final Investment Decision to be made within the identified LNG supply and demand window. This is vital in light of the current intense market environment and for Pacific NorthWest LNG not to lose out on long term contracts to competitive United States LNG projects," said Tan Sri Shamsul Azhar Abbas, president and CEO of Petronas.
Petronas also praised the B.C. government, which has in recent months, put in place a favorable LNG Income Tax, details for offsetting greenhouse gas emissions and new agreements with First Nations, including recent legislation with the Nisga'a Nation.