Cabinet Seeks No Guarantees Before Reviewing Petronas Megaproject
As Canada’s federal Cabinet nears an October 2 deadline for deciding on a controversial, $36-billion liquefied natural gas (LNG) development in British Columbia, Bloomberg is reporting that the government has not sought any guarantee that the project would actually proceed if it received approval.
The question is worth asking after the developer, Malaysian state oil company Petronas, announced a stunning 96% drop in second-quarter profits due to crashing global oil prices. “Petronas will review its liquefied natural gas development in Canada after the government there finishes its own assessment of the project around September or October,” Bloomberg reported last month. “The company plans to revisit the cost, schedule, and market conditions for the project before making a final investment decision with its partners after delays in securing regulatory approvals.”
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“I don’t think we’re in a position to get guarantees from the company,” Natural Resources Minister Jim Carr told the news agency more recently. “We know other LNG projects in B.C. that are not proceeding. Those decisions will be made by boards and by executives.”
He acknowledged that Petronas’ decision may also hinge on the cost of any conditions Cabinet attaches in the event that it approves the project.
In May, the National Observer reported that a completed Pacific NorthWest LNG facility would soak up 87% of B.C.’s carbon budget for 2050, though the Pembina Institute’s Matt Horne said the project could be modified to “do 50% better than what was initially proposed.” LNG projects in general can be expected to boost emissions in most importing countries, according to a report last month by the C.D. Howe Institute.