Pacific NorthWest LNG says it will not be proceeding with the $36-billion liquefied natural gas (LNG) mega-project it had planned to build in British Columbia.
The consortium says the announcement by Petronas and its partners comes after a careful review of changes in market conditions.
“We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry have led us to this decision,” says Anuar Taib, executive vice-president and CEO (upstream) for Petronas.
Speaking to reporters shortly after the news broke, Energy, Mines and Petroleum Resources Minister Michelle Mungall was quick to point out the decision was not politically-motivated.
“Let’s be very, very clear that Petronas has said that this is about global market pricing in the long term,” she says. “This isn’t about any specific detail with this project, this is about global market pricing.”
The BC Liberal caucus however has been quick to blame what they call the NDP’s “anti-jobs agenda” and “Closed for Business attitude” for the project’s failure.
“This attitude, as well as additional costs the NDP plan to impose on job creators with measures such as a higher, non-revenue neutral carbon tax, send a clear signal that under the NDP, British Columbia is not a friendly market to invest in,” a Liberal statement reads.
LNG prices have been hit by a global oversupply as numerous projects have come online, challenging the economics of the development and others that were proposed in the province.
The consortium has already sunk billions into developing the natural gas fields in the B.C. interior, but the project would have required much more investment including an $11.4-billion LNG terminal in Port Edward, BC.
The project, which secured Prime Minister Justin Trudeau’s approval last year, was proposed as a way to reduce coal use in Asia, but it has also faced criticism for the potential greenhouse gas emissions that would have resulted.