Petronas drops $28.8 billion natural gas project in Canada

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Petronas said Tuesday it was pulling out of its Can$36 billion ($28.8 billion US) liquefied natural gas exporting project on Canada’s west coast long opposed by environmentalists and native rights activists.

The Pacific NorthWest LNG project was greenlighted in September to build a pipeline and two liquefied natural gas terminals on Lelu Island, British Columbia, an area home to a huge nature preserve and wild salmon habitat.

Each of the two plants would liquefy some six million tonnes of natural gas per year, with the possibility of adding a third gas terminal at a later date.

The pipeline built by the operator TransCanada would have had to cross 900 kilometers of British Columbia between Hudson’s Hope and Lelu Island. But lagging natural gas prices and other changes in energy markets contributed to the about-face from the Malaysian energy giant and its partners.

The project planned for the district of Port Edward was nixed after “a careful and total review of the project amid changes in market conditions,” a company statement said.

“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,” said PNW LNG board chair Anuar Taib.

“Petronas and its North Montney Joint Venture partners remain committed to developing their significant natural gas assets in Canada and will continue to explore all options as part of its long-term investment strategy moving forward.”

A number of First Nations and environmental groups sued the federal government and Petronas unsuccessfully to try to stop the project. Prime Minister Justin Trudeau had justified his decision to okay the project by pointing to the need for economic growth, and stressing that the project would be environmentally sustainable and responsible.

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