Latest Snag for Petronas LNG Plan Is a Canadian Political Race
by NATALIE OBIKO PEARSON | Febuary 10, 2017
The latest challenge facing a $27 billion liquefied natural gas terminal that Malaysia’s Petroliam Nasional Bhd. wants to build in western Canada: the race for the office of the premier in British Columbia.
John Horgan, leader of the province’s opposition New Democratic Party thrust the LNG project into the middle of his campaign on Friday, telling reporters it was “poorly sited.” He vowed to “find a better place and a better way” to build the gas export terminal should he become premier.
Petronas is already looking at changing its plans for the terminal to circumvent a sensitive marine area that’s become a flash point of controversy. After more than three years of regulatory reviews and battles against environmentalists, the company finds itself back in the spotlight ahead of the May 9 election, when Horgan will face off against the ruling B.C. Liberal Party’s Christy Clark, who previously won after promising to create a C$100 billion ($76 billion) prosperity fund on LNG revenues.
The Pacific Northwest LNG project won Canadian government approval in September following years of regulatory reviews and strident opposition from environmentalists, scientists and indigenous communities who warned it could disrupt an area critical to migrating salmon. The project has also faced economic headwinds as more than 20 gas export proposals in the province have been stalled by a global supply glut and plunging prices.
To quell local opposition, Petronas is considering moving the project’s docking facilities to neighboring Ridley Island, where ships would berth to take deliveries of the fuel for export, two people familiar with the negotiations said in December. Ridley would be a better location with easier access to tidewater, Horgan said Friday.
"I will deal with those issues after the election should I be successful," he said. "I’ve made that clear to the proponents."
Horgan was speaking at a business lunch to an audience that included an executive from a different LNG project backed by Royal Dutch Shell Plc. A final investment decision for that terminal in the same region was delayed last year because of industry challenges and capital constraints.
In his speech, Horgan said energy project developers should take a cue from Woodfibre LNG, backed by Indonesian billionaire Sukanto Tanoto’s RGE Group. That company worked with local indigenous members to design a smaller C$1.6 billion LNG project. It has largely avoided controversy and is set to start construction this year and export gas in 2020.