Pacific NorthWest LNG, a unit of Malaysia's Petronas, president Greg Kist, speaking at a Vancouver conference, said the final investment decision (FID) would hinge on whether the provincial government comes out with promised tax measures for the LNG industry before the new year.
SINGAPORE: Malaysia's Petronas is set to auction one of its crude grades on the Dubai Mercantile Exchange, according to sources familiar with the matter, making the state-owned company the first to sell a non-Middle East oil on the trading platform.
Petronas has plans to offer September loadings of its Kimanis crude grade next month, the industry sources said.
DME documents - updated in June and posted on the exchange's website - indicate Petronas trading arm Petco is looking to sell the Kimanis grade over the Dubai platform, although without providing any details on volumes or timing.
Petronas and DME did not respond to queries on the matter.
The move comes amid rising Kimanis crude output, with the August loadings of the grade expected to rise to a record 12 cargoes of 600,000 barrels each.
Rising Kimanis production and an overall global surplus has pressured primary sellers of the grade, including Petronas, Royal Dutch Shell, Murphy Oil, ConocoPhillips , Petroleum Brunei and Pertamina.
Kimanis premiums plunged to their lowest in nearly two years at around $1.50 a barrel to dated Brent in April, underscoring the difficulties sellers face in the current market.
"Kimanis needs to find new homes ... It's good to find new buyers apart from the usual end-users," a trading source who markets the grade said about Petronas' DME plans.
In a DME auction, potential buyers - who have to be pre-approved by the seller - will have two minutes to place bids after the company offering a cargo has set a minimum price.
"The auction does not mean a better price, but you get to set a floor price. So if you get better than the floor price, it's a good thing," said a source involved in the auction who is not approved to discuss the matter publicly.
Four cargoes of Middle East crude have been auctioned on the DME since January 2016. DME charges a 1.5 cent per barrel fee for cargoes sold via auction.
Kimanis is one of the largest Malaysian crude output streams. The Malaysian crude price mechanism introduced in 2014 was revised in January to add Kimanis to a benchmark formula based on the Labuan, Miri Light and Kikeh grades. - Reuters
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