Petronas to spend up to $16B on B.C. LNG project
Two new liquefied natural gas facilities will be built in northwestern B.C. in the next two years by Malaysia's national oil company, Petronas, which announced Tuesday that it will spend up to $16 billion on the projects.
Petronas said it will invest between $9 billion and $11 billion to construct the LNG liquefaction plants, which will be built on Lelu Island, off the coast of B.C. in the Port Edward district south of Prince Rupert.
Another $5 billion will be invested in a 750 kilometre-long pipeline, to be built by TransCanada Corp., that will supply gas to the two plants, Arif Mahmood, Petronas vice-president of corporate planning, said in an email to The Associated Press.
The announcement comes just weeks after the Liberal government was returned to power in B.C., with LNG development a major focus of Premier Christy Clark's campaign.
Other projects coming
"I think some of the investors were waiting to see the results of the election before they decided that they were going to make those commitments," Clark told CBC News.
"I know there was lots of debate in the campaign about whether or not this was really going to happen. Well, $16-billion from one of the largest private sector companies in the world that deals in gas ... that's a pretty big commitment."
Last week, Clark named Rich Coleman as the province's first minister for natural gas development.
Coleman told the CBC Tuesday the project will likely take about two years to get through regulatory hurdles, and he hinted that more projects could be on their way, although he declined to mention specifics, citing concerns over violating confidentiality.
"It shows that the company is gaining more and more confidence to make the investment in B.C.," he said. "They always told me they thought they could move up their opportunity by about a year if they thought things were good.
"It validates, in my opinion, the premier's commitment to natural gas and how it can be a future driver for a debt-free B.C."
The Pacific Northwest LNG project will liquefy and export natural gas produced by Progress Energy Canada. Both companies are owned by Petronas, which said it has already secured its first buyer for the B.C. project's fuel, Japan Petroleum Exploration Co., or Japex.
With files from The Associated Press and CBC's Robert Zimmerman