The B.C. government and Malaysia's state-owned Petronas have reached a deal designed to provide lift-off to a liquefied natural gas project.
B.C. Premier Christy Clark and Petronas chief executive officer Shamsul Azhar Abbas signed the letter of intent Monday as a B.C. delegation led by Ms. Clark launched an Asian trade mission with the first stop in Malaysia.
Petronas has asked the province to hammer out details of a tax to be levied against proposed B.C. LNG export terminals while the government has requested that the Malaysian firm ramp up efforts in the race to export B.C. LNG.
Both sides agreed Monday to assign officials to prepare terms of reference by June 30 and then have a project development agreement in place by Nov. 30.
A joint venture led by Petronas plans to make a final investment decision by the end of 2014 on whether to forge ahead with multibillion-dollar plans to transport northeast B.C. natural gas to a proposed LNG export terminal on Lelu Island, located near Prince Rupert in northwestern British Columbia.
Petronas will hold a 62-per-cent stake in the Pacific NorthWest LNG project after China's state-owned Sinopec joins the joint venture. Sinopec and three others will have a combined 38-per-cent interest. Those others are India's state-run Indian Oil Corp. Ltd., Japan Petroleum Exploration and Petroleum Brunei.
"Securing this commitment from Petronas shows that our strategy for attracting investment to B.C. is working," Ms. Clark said in a statement from Kuala Lumpur. "Our goal is to be the most competitive jurisdiction in the world for LNG."
The B.C. government and Petronas say that signing the letter of intent underscores their enthusiasm for securing "mutual interests" to make the Pacific NorthWest LNG export terminal a reality.
Many hurdles remain, including obtaining environmental approvals. But if all goes well, Pacific NorthWest LNG will begin shipping LNG by tankers to Asia in late 2018.
There are 14 B.C. LNG proposals in the works, but industry experts say there is room for only three or four projects at most.
Rich Coleman, B.C.'s Minister of Natural Gas Development, said the provincial government is helping to forge good relations between the LNG industry and First Nations.