Monday, March 7, 2016

Financial Post article on Lelu Island LNG terminal ultimatum creates a Monday tempest

A story indicating that the Malaysian energy company Petronas was preparing an ultimatum of sorts when it comes to the Federal Government timeline for the Lelu Island LNG terminal project, has spawned a flurry of email responses from both an official at Canadian based Pacific NorthWest LNG and the provincial government's LNG Minister Rich Coleman.

The article from the highly respected financial columnist Claudia Cattaneo  featured the eye catching headline of "Malaysia's Petronas threatening to abandon LNG project over new climate change rules" and provided some background on the frustrations that the Malaysian company reportedly has with the new landscape of climate change priorities that the Trudeau Liberal's have focused on energy projects in Canada.

Citing a source said to be close to the project, Cattaneo noted that if the project has not received federal approval by March 31st, the company may walk away from the project, that despite an initial investment already in place estimated at 12 billion dollars to deliver the project to this point.

Cattaneo's source also suggests that the company is concerned that the Federal Liberals will provide for stalling tactics, rather than handing down a decision following the end of the current process, leaving the company to continue to provide investment money while LNG conditions continue to decline.

You can review the full story from the Financial Post here.

The story had a bit of a seismic effect in British Columbia through the afternoon, with the Cassidy Oliver of the Vancouver Province contacting both Pacific NorthWest LNG officials and the province's LNG Minister Rich Coleman for further comment.

Their responses were posted to twitter late Monday afternoon.

The first from Pacific NorthWest LNG president Micheal Culbert indicated that reports of an ultimatum were false.

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While Mr. Coleman the LNG Minister provided for a string of observations on the nature of the final decision process and the province's commitment to LNG in British Columbia.

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As we outlined in February when the Draft Report was delivered for further review, the deadline for comments for the Pacific NorthWest LNG proposal's Final Draft comes up on March 11th.

With residents who may have an interest in providing their comments having until Friday to make their thoughts known, you can learn more on that process from this information page from the CEAA.

The project then will be turned over to the Federal Government for Cabinet review, where Pacific NorthWest LNG and residents of the Northwest with an interest in the outcome of the process will learn what the Federal Government's thinking might be on the proposed development.

A read through of the Financial Post article from today would seem to indicate that there are still concerns that with a finish line in sight, an outcome for the lengthy process may not yet be on the cusp of being secured.

In recent weeks, reports out of Malaysia have also highlighted the nature of cost cutting that the energy company is currently engaged in while also suggesting that Petronas is seeking new investors or an increased share by the existing pool of investors for the British Columbia project.

You can review more information related to the Pacific NorthWest LNG project from our archive page.

Update: Tuesday brought reports of the denial by Pacific NorthWest LNG's Michael Culbert of any plans to walk away from the Lelu Island project.

March 8 -- Petronas-led Canada LNG project head denies report it will walk away
March 8 -- Premier says Petronas Not Threatening to walk away from LNG Project
March 8 -- Premier says Petronas stands by proposed LNG facility in B. C.

2 comments:

  1. What have they spent $12 billion? That's a third of the project cost. The figure seems exaggerated - what company would spend that before committing and winning all regulatory approvals.

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    Replies
    1. I suspect that's investment in Canada.

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