Malaysian giant Petronas is reportedly contemplating a sale of a majority stake in the Pacific NorthWest LNG project that has recently been awarded the clearance by the Canadian Federal government.
However, with the nod, the government attached 190 legally binding conditions in order to mitigate the environmental impacts of the C$36 billion (US$27.25 billion) project.
Immediately after receiving the approval, Pacific NorthWest LNG’s president, Adnan Zainal Abidin , noted that moving forwards to the financial investment decision depends on a complete project review to be conducted over the coming months by PNW LNG and its shareholders.
The low oil prices have hit Petronas’ profits, forcing the company to cut costs as well as jobs, and now the economics of the PNW LNG project is in doubt with dropping LNG prices.
The company could sell its majority stake in the project, Reuters reports, citing sources close to the matter.
Gas prices, costs and returns are set to be reviewed before a final decision is made, according to the report. It is also possible for Petronas to suspend the project until gas prices start to recover and Petronas is able to secure favorable long-term contracts.
The proposed Pacific NorthWest liquefaction facility will comprise an initial development of two LNG trains of approximately 6 million tons per annum each, and a subsequent development of a third train of approximately 6 mtpa.
Partners in the project are Sinopec, JAPEX, Indian Oil Corporation and PetroleumBRUNEI.
LNG World News Staff