Petronas, in consultation with its partners, has decided to terminate the C$36bn ($28bn) Pacific NorthWest LNG project at Port Edward in British Columbia (BC), Canada.
The company is attributing the decision to changing global gas market conditions, including falling prices.
Petronas upstream executive vice-president and CEO Anuar Taib 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.”
“We, along with our North Montney Joint Venture (JV) partners, remain committed to developing our significant natural gas assets in Canada and will continue to explore all options as part of our long-term investment strategy moving forward.”
The company intends to continue its operations in Canada through Progress Energy Canada and its natural gas resources.
Planned to be located on Lelu Island in the District of Port Edward, the Pacific LNG project was a liquefied natural gas export facility.
The majority of Pacific NorthWest LNG is owned by Petronas, while Sinopec, Japan Petroleum Export (JAPEX), Indian Oil and Petroleum, Brunei are minority shareholders in the project.
A total review of the proposed LNG facility was planned before a final investment decision was made.
The proposed facility would have comprised an initial development of two LNG trains of about six million tonnes per annum (MTPA) each, and a subsequent development of a third train with the same capacity.
It was supposed to liquefy and export natural gas produced by Progress Energy.
The North Montney JV, with Progress Energy as its operator, is focused on developing the resources in the North Montney formation situated along the foothills of the Rocky Mountains in north-east BC.
It has around 800,000 acres of largely contiguous mineral rights in the formation, with more than 52tcf of reserves and contingent reserves.
Image: Lelu Island facility. Photo: courtesy of Pacific NorthWest LNG.