The Malaysian state-held company Petroliam Nasional Berhad (Petronas) and its partners announced they will not proceed with the C$37bn (US$27bn) Pacific NorthWest LNG project on Lelu Island at Port Edward in British Columbia (Canada) because of increasingly difficult market conditions.
The 12 Mt/year gas liquefaction and export facility project (option for a third train of 6 Mt/year) was developed by Petronas (62%), in partnership with Sinopec, Japex, Indian Oil Corporation (10%) each, China Huadian (5%) and Petroleum Brunei (3%).
In December 2014, Petronas and its partners already experienced difficulties and decided to defer the FID, due to high development costs related to the pipeline (at this time US$21bn) and the facility (US$11bn, which must be reduced before any positive FID) and to uncertainties over the project's economic viability. In September 2016, the project was approved by the Canadian Environmental Assessment Agency (CEAA) and the Canadian government after three years of regulatory review. In April 2017, Petronas made a last move to save the project and considered using another location to reduce the costs and proposed the former Ridley Island facility (the site of Shell's US$5bn Prince Rupert abandoned LNG project) as the future building location for the facility.
In the aftermath, the Canadian infrastructure company TransCanada reacted to the announcement and said it will review its proposed Prince Rupert Gas Transmission (PRGT) project. Under its agreement with Petronas' affiliate Progress Energy, TransCanada will be reimbursed for the full costs and carrying charges incurred to advance the PRGT pipeline. The 900-km long PRGT project route (about 780 km of land pipeline and around 110 km of marine pipeline) was planned to spread from Hudson's Hope to Lelu Island, off the coast of Port Edward, near Prince Rupert and connect with the terminal. With the abandonment of Pacific Northwest, the PRGT pipeline will have to be reviewed as well.
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