PETRONAS boss Datuk Wan Zulkiflee Wan Ariffin aims to sign a conditional final investment decision (FID) for its proposed multi-billion-ringgit liquefied natural gas (LNG) export terminal in Canada in the coming weeks.
The national oil company is also confident of resolving issues with a Canadian aboriginal group known as Lax Kw’alaams First Nation.
Petronas executive vice-president and CEO of upstream Datuk Wee Yiaw Hin said among the conditions for the FID are ones related to environmental approval.
Petronas is still awaiting environmental approval from the federal government, but the project received environmental approval from the provincial government in November last year.
On May 20, Canada’s British Columbia and a group of companies led by Petronas were reported to have reached a preliminary deal on taxes and royalties for a proposed C$36bil LNG project.
The provincial government of British Columbia and Petronas-led Pacific NorthWest LNG said the memorandum of understanding sets a path toward forging a FID decision on the project. This would eventually lead to the construction of an LNG plant on Lelu Island near Prince Rupert, British Columbia.
“With this recent development, we are looking to achieve a conditional FID in the coming weeks,” Wan Zulkiflee told reporters at a press conference after the firm announced its first-quarter results.
The Government deal comes a week after the First Nation community decided to reject an offer of C$1bil, in return for supporting an LNG export terminal in northern British Columbia. They said that the development would harm a fish habitat next to the project site.
The Pacific NorthWest LNG project involves the construction of facilities to process and export natural gas to be produced by Progress Energy Canada Ltd in north-eastern British Columbia, Canada.
Besides Petronas, Pacific NorthWest LNG is owned by China Petroleum & Chemical Corp (better known as Sinopec) (15%), Japan Petroleum Exploration Co Ltd (10%), Indian Oil Corp Ltd (10%) and Petroleum Brunei (3%), according to the project’s website.
Wan Zulkiflee says that the Canadian Government is working closely with Petronas to resolve the necessary issues related to First Nation’s concerns.
“The Government and the provincial government are working with us to bring this project forward.
“We will continue to have constructive engagements with First Nation, and keep all avenues open,” he adds.
On weather the First Nation community’s consent is required before the project can proceed, Wan Zulkiflee says the decision lies with the Canadian Government.
Wee says that currently, there are five First Nation bands, and Petronas has completed the deal with three. Progress Energy is Petronas’ Canadian gas exploration unit, which reportedly has proven cumulative reserves of 15 trillion cu ft of gas.