A Canadian subsidiary of Malaysia’s Petronas has announced a green light for the $11 billion Pacific NorthWest LNG project in Prince Rupert.
In a press release issued June 11, Pacific NorthWest LNG president Michael Culbert said the company is moving forward on a final investment decision.
The FID is contingent on two conditions being met: approval of the project by the Canadian Environmental Assessment Agency (CEAA) and final approval in the B.C. Legislature of an earlier announced project development agreement on taxes and royalties.
The company also said it still has work to do with First Nations.
“In parallel with work to support the final investment decision, Pacific NorthWest LNG will continue constructive engagement with area First Nations, local communities, stakeholders and regulators,” Culbert said.
“The integrated project is poised to create thousands of construction and operational careers in the midst of the current energy sector slowdown.”
When the capital cost of the LNG plant, a new pipeline and upstream natural gas assets are included, Petronas’ investment in B.C. is estimated at $36 billion – an expenditure on par with the capital cost of China’s Three Gorges Dam.
The positive FID comes despite some regulatory hiccups related to the site it has chosen: Lelu Island. Located as it is near sensitive salmon habitat, the site has raised concerns about the impact on juvenile salmon.
Those concerns has led the CEAA to hit the pause button on the project's environmental assessment for a third time. The CEAA has asked for more information from the company on 3-D modelling it has done for the Lelu Island site.
Those same concerns also led the Lax Kw’alaams First Nation to reject a $1.2 billion benefits agreement offer from Petronas.
On May 20, the project cleared a major hurdle when it signed a development agreement with the B.C. government that sets tax rates and royalties.
