Malaysia's state-owned Petronas says it is committed to building a B.C. terminal to export liquefied natural gas, despite volatile energy markets and doubts from some analysts.
Petronas leads the Pacific NorthWest LNG consortium that wants to construct the $11.4-billion export terminal on Lelu Island on British Columbia's North Coast.
Petronas executive vice-president Wee Yiaw Hin issued a statement Thursday from Kuala Lumpur, after a series of analysts warned over the past six months that weak LNG prices in Asia and other issues could delay the project by months, if not years.
"Petronas would like to reaffirm its commitment to deliver long-term LNG supply to its customers through the Pacific NorthWest LNG project in Canada, despite the current market volatility for oil and gas," said Mr. Wee, who is also chairman of Pacific NorthWest LNG. "Together with its partners, Petronas is ready to proceed with the project on the condition that it receives the remaining regulatory approval from the Canadian Environmental Assessment Agency [CEAA]."
B.C. Natural Gas Development Minister Rich Coleman spoke with senior Petronas officials in late September and again Thursday. "I have a lot of confidence that these are guys are still focused with regards to an LNG plant," he said in an interview.
Key issues now include a rift among the Lax Kw'alaams First Nation over whether to support test drilling on Lelu Island and nearby Agnew Bank.
"We work with the First Nations to find long-term solutions, and we will," Mr. Coleman said.
In a report last month, AltaCorp Capital Inc. said the Petronas-led group is keen to address concerns about the project's potential harm to juvenile salmon habitat in Flora Bank, a sandy area located next to Lelu Island at the Port of Prince Rupert.
CEAA is expected to rule in early 2016 on the project after it scrutinizes Pacific NorthWest LNG's plans in the Skeena River estuary, especially designs to build a suspension bridge and pier that would carry a pipeline from Lelu Island to a dock for LNG tankers in Agnew Bank.
"This project is caught in the federal process," said Mr. Coleman, who will deliver the opening remarks at a three-day LNG conference that starts next Wednesday in Vancouver. He will also be a speaker at an LNG conference in Singapore later this month and plans to meet in Asia with Petronas chief executive officer Wan Zulkiflee Wan Ariffin.
Petronas officials met in Vancouver late last month with representatives from the project's five Asian co-owners – two companies from China and one firm each from Japan, India and Brunei.
The venture's co-owners are financial backers and also "off-take partners" – buyers of LNG. "Pacific NorthWest LNG has fulfilled the required technical and commercial components of the project and is looking forward to meeting future LNG market demands," Mr. Wee said.
The consortium is striving to become the first major LNG exporter in the province, targeting a launch by the end of 2019, although some analysts say that will likely be delayed until 2020 at the earliest, even if construction starts in 2016.
British Columbia has 20 LNG proposals, although fierce global competition means only a few stand a chance of launching, industry experts say.
In April, Moody's Investors Service Inc. said Pacific NorthWest LNG is the best bet to forge ahead in British Columbia, but cautioned that "Petronas appears to be leaning toward deferring this project, as lower oil prices have reduced its cash flow and it directs more investments domestically to Malaysia."