Malaysia’s Petroliam Nasional Bhd or Petronas voiced its concerns over the global gas glut, putting in question whether it will move forward in the US$27 billion (RM120.42 billion) liquefied natural gas (LNG) project on the British Colombia’s Pacific Coast.
With the Canadians not necessarily in a hurry to see a rapid resolution of project imposing 190 additional conditions – mainly related to environmental issues – and the Malaysian oil giant still battling it out with natives opposed to the project, Petronas now seems uncertain of its future in Canada.
Petronas group President and CEO Wan Zulkiflee Wan Ariffin sounded the company’s uncertainty when he said Petronas is looking at the cost structure, plant size, technologies and LNG global demand forecasts, not knowing whether it had sufficient orders for the Canadian LNG.
Local business dailies in Malaysia reported that Wan Zul (as he is commonly called) said Petronas is reviewing its strategy in the project, adding that they needed to know how they can minimise the cost and whether “we have ready demand for the LNG (produced from the Canadian project).”
He also said an overall review — and not just selected components — will determine the fate of its liquefied natural gas (LNG) project in Canada.
He admitted that demand for LNG has dwindled, saying that last year, only six million metric tonnes of LNG were commissioned despite approval for 60 million metric tonnes.
He also pointed to a tepid market, oversupply and strict spending by oil firms noting the worries over glut, over-production and low demand that continued to influence the expansion strategies of global oil and gas companies.
The Malaysian company said it is currently in consultation with its partners in the project, that is China Petrochemical Corp, Japan Petroleum Exploration Co, Indian Oil Corp and Brunei National Petroleum Co, before arriving at a final decision.
Petronas owns about 61% interest in the project, which would also include the construction of an LNG plant on Lelu Island near Prince Rupert and other related infrastructure.
These are hotly contested by local anti-environmental groups.