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Malaysia’s landmark Petronas Towers loom in the background in Kuala Lumpur in January. An executive at the firm says it’s looking at new projects that will help it move natural gas from its B.C. properties to the rest of Canada.MANAN VATSYAYANA/AFP / Getty Images

A Petronas executive says the Malaysian energy giant is exploring becoming a partner on a pipeline project that would help move natural gas from its properties in northeast British Columbia.

State-owned Petronas, which cancelled plans last month for a B.C. liquefied natural gas terminal, needs pipeline access to market its natural gas in the North Montney area, Anuar Taib told the Malaysian government's news agency Bernama.

"We are now looking at the possibility of working together with partners or parties to look at a pipeline that could be built to connect that area to the rest of Canadian market," he said in an interview with Bernama.

Mr. Taib, a Petronas executive vice-president who also heads upstream operations, didn't disclose which pipeline project he has in mind. But he emphasized the importance of unlocking the value of the company's B.C. natural gas reserves, saying "there must be ways for us to monetize those resources."

In March, TransCanada Corp. sought approval from the National Energy Board to build a portion of its $1.4-billion North Montney pipeline.

Progress Energy Canada Ltd., a unit of Petronas, said at the time that it supported the revised application – a scaled-down version of the original $1.7-billion proposal.

Petronas had invested billions of dollars in Canada before it announced the cancellation in July of the Pacific NorthWest LNG joint venture planned for the Port of Prince Rupert in northwest British Columbia. A global glut of LNG has dashed the dreams of most proposals to export the fuel from Canada's West Coast to Asia.

An industry source told The Globe and Mail that Petronas is also studying existing pipeline routes that carry natural gas from Canada to the U.S. Gulf Coast, where there are petrochemical plants and LNG export sites.

One potential route could be through the Alliance Pipeline system that runs from northeast British Columbia through Alberta and Saskatchewan and ends in Chicago.

In Chicago, Alliance connects with Natural Gas Pipeline Co. of America's system from Illinois to the U.S. Gulf Coast.

Kinder Morgan Inc. and Brookfield Infrastructure Partners LP jointly own Natural Gas Pipeline Co. of America, with Kinder Morgan serving as the operator.

Earlier this year, Calgary-based Seven Generations Energy Ltd. inked a supply pact with U.S. LNG exporter Cheniere Energy Inc. that will see growing production from Seven Generation's Kakwa River natural gas project in northwest Alberta exported from a Louisiana port.

Petronas is also pondering the purchase of a minority stake in the Royal Dutch Shell PLC-led LNG Canada project near Kitimat in northwestern British Columbia, possibly through acquiring the 15-per-cent interest held by South Korea's Kogas, an industry source said.

TransCanada hopes to build the $4.7-billion Coastal GasLink pipeline from northeastern British Columbia to Kitimat to supply the planned LNG Canada export terminal. Shell and its partners delayed a final investment decision last year on the terminal, but they have been continuing to do work on the Kitimat industrial site, including dismantling storage tanks left by the former occupant, methanol maker Methanex Corp.

In a statement Wednesday, TransCanada said that its pipeline network accounts for more than one-quarter of the natural gas transported daily across North America: "Through our system, we have the ability to move natural gas from the prolific North Montney play to market hubs across the continent, including to the U.S. Gulf Coast."

Calgary-based TransCanada added that "there is still a strong need for Canadian natural gas supplies to get to market."

In 2012, Petronas paid $5.2-billion to acquire Progress Energy. Progress Energy spent $5-billion on its northeast B.C. drilling operations from 2013 to 2015, but reduced its spending to $500-million last year and has a relatively modest budget this year in the North Montney region, industry observers say.

Mr. Taib, who formerly served as Pacific NorthWest LNG chairman, said cost-cutting efforts have worked on the drilling side at Progress Energy in Canada. "The key there is about how competitive can we be in that market. Our team in Progress Energy Canada has been doing a lot of improvement efforts," he said.

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