Thursday, September 25, 2014

Petronas threatens to pull out of Pacific Northwest LNG project

In unusually blunt language, the head of the main financial backers for the planned LNG development on Lelu Island is threatening to shut down his consortium's plans to develop a terminal operation on the North Coast.

Comments that no doubt will deliver a bit of a shock to those that were looking to LNG to provide a key shift to the economic landscape of the region.

Seemingly pointing the finger at the slow development of a taxation and incentive plan for LNG, Petronas Energy CEO Shamsul Abbas is quoted in a number of news reports today as stating that the Malaysian Energy giant, "needs to be assured that the project is economically viable and satisfies its investment criteria before going ahead with the project"

Other comments from him that will send alarm bells ringing for those on watch for Premier Clark's ambitions LNG strategy, include observations on what he sees as Canada's dithering on the issue. Calling our apparent lethargy on the theme a lack of action that has left the Canadian landscape of LNG development as one now of uncertainty, delay and short vision.  

To emphasize further the frustration on the Malaysian side of the LNG debate,  he commented that Canada has to buck up real fast to be a credible global LNG player and if it wants to be taken seriously.

The comments from Mr. Abbas were first delivered through the Financial Times website, with this article from Jeremy Grant in Singapore.

The topic of LNG taxation was a theme at this weeks UBCM meeting, as we outlined on the blog yesterday, Natural Gas Development Minister Rich Coleman outlined some thoughts on the planned release of the province's taxation plans for next month.

At the same time the Minister fired some warning shots to the municipalities on Monday regarding any covetous eyes that local communities may have on taxation from LNG.

While those comments caused a bit of a stir through the week at Whistler, we imagine that today's announcements from Malaysia will steal much more of the headlines from the UBCM convention.

Premier Clark is to provide the closing address to UBCM on Friday, comments we imagine which will now have to be reworked a bit to reflect the sudden shift in attitudes towards her LNG strategy.

Mr. Abbas is set to make a trip to Canada on Friday, where we imagine the topic of taxation, financial incentives and the future of his North Coast plans most likely will make up for most, if not all of the discussion.

While the energy giant awaits further news on the twin concerns of taxes and incentives, the prospect of a final investment decision, which would launch the giant economic shift for the region will seemingly remain in question.

As at the moment does the fate of the project itself.

More on the surprising twist in the North Coast LNG story can be found from the dispatches of Canadian media sites below:

Globe and Mail -- Petronas threatens to 'call off $10 billion B. C. LNG project: report
Globe and Mail-- Petronas plays hard ball with B. C. over Pacific NorthWest LNG
National Post-- Petronas chief warns it could pull out of Canadian LNG project
Vancouver Sun-- Petronas threatens to pull out of $10 billion LNG project near Prince Rupert
CTV-- Petronas threatens to pull out of B. C. gas project: report
CBC-- Petronas may pull out of B. C. LNG project, reports suggest
CKNW-- Big new problem for the Premier's LNG strategy
CKNW-- LNG discussion on Simi Sara Show ( audio vault 10-10:30 Sept 25 )
CKWX News 1130-- Petronas threatens to pull out of LNG Project
Global BC-- Petronas threatens to pull out of LNG project
Business in Vancouver-- Petronas warns it could pull out of $10B B. C. LNG project
BC Business-- Christy Clark unconcerned as Petronas teeters on $10-billion LNG investment
CBC Daybreak North-- What could Petronas considering pulling out of B. C. LNG mean for local investment? (audio)
Georgia Straight-- Straight writer foreshadowed trouble Petronas would have financing B. C. LNG project
Victoria News-- Coleman plays down Petronas LNG threat

For a review of all items from our Pacific NorthWest LNG file see our archive page here.

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