VANCOUVER, Oct 2 (Reuters) – British Columbia’s leader is “very confident” that Malaysia’s Petronas will move ahead with a liquefied natural gas (LNG) export terminal in the Canadian province, despite threats from the company that it could pull out of the roughly $11 billion project.
Premier Christy Clark, speaking with reporters on Thursday, said meetings this week with Petronas chief executive Shamsul Azhar Abbas were “productive,” but she declined to put a timeline on a final investment decision from the state-owned oil and gas company.
“Both sides really want to make this project a success, we both want it to work,” she said. “So we’ve got some negotiating ahead of us, we’re right in the midst of that right now, and I’m very confident that we are going to conclude that negotiation successfully.”
A spokesman for the company, officially known as Petroliam Nasional Bhd, was not immediately available for comment.
Considered a front-runner in the race to build Canada’s first LNG export facility, Petronas had promised a final investment decision on its Pacific NorthWest LNG project by year-end.
But last week the company threatened to call off the project, which is part of a broader $35 billion investment in Canadian natural gas, over slow progress on a taxation plan, a lack of incentives and regulatory delays.
In an interview with the Financial Times, chief executive Shamsul criticized the province over its proposed LNG tax and said “the project remains uncertain and I doubt we will be able to make a positive (final investment decision) by year-end.”
British Columbia has not yet finalized the details of its new LNG tax, which could determine the fate of its nascent gas export industry. The tax legislation will be unveiled in the provincial legislature later this month.
Clark said her government is working hard to hammer out a plan that is economically viable for companies like Petronas while still providing returns to the province.
“My job is to maximize the benefits for our shareholders, and that’s the people of British Columbia,” she said. “But I also know that 100 percent of zero is zero, so we have to land that tax at the right spot.”