PETRONAS and its partners in Pacific NorthWest LNG have decided to defer a final investment decision (FID) on the project.
The Malaysian company and its partners continue to review the economic viability of the project which, in a time of declining oil prices, presents challenges.
Consequently, PETRONAS and its partners have decided to defer the project’s$36 billion FID “pending further clarity on substantive items of importance to ensure that critical project components align with economic viability of the project and competition from other LNG producing countries.”
Costs associated with the pipeline and LNG facility remain challenging and must be reduced further before a positive FID can be undertaken, the company stated. At the same time, Pacific NorthWest LNG will continue work to secure necessary regulatory and other approvals from the Government ofCanada.
“PETRONAS hopes that all outstanding factors can be resolved as soon as possible to enable the final investment decision to be made within the identified LNG supply and demand window. This is vital in light of the current intense market environment and for Pacific NorthWest LNG not to lose out on long-term contracts to competitive United States LNG projects,” saidShamsul Azhar Abbas, PETRONAS president and CEO.