Petronas Nixes the Pacific Northwest LNG Megaproject
Petronas and its partners are not going to proceed with the proposed USD 28-billion Pacific Northwest LNG project at Port Edward, British Columbia, Canada. Petronas is the majority owner and partners include Japan Petroleum Exploration Co., China Petroleum and Chemical Corp. (Sinopec), Indian Oil Corp., and Brunei National Petroleum Co.
Petronas’ Executive Vice President and CEO Upstream, Anuar Taib, said, “We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry have led us to this decision.” The prolonged period of low LNG prices factored in the decision.
The regulatory approvals have been a long time coming. In February 2013, the project description was submitted to the Canadian Environmental Assessment Agency (CEAA). A year later, the Canadian National Energy Board granted a license to export up to 22 million tonnes per annum (MTPA) of LNG annually for 25 years. In March 2016, the government granted the CEAA more time to review the project, but in September 2016, the government approved the project with 190 conditions with an addition of a maximum cap on greenhouse gas emissions.
Described as an integrated unconventional-shale-gas-to-LNG project, natural gas produced by Progress Energy Canada in northeastern British Columbia was to be liquefied and exported to countries in Asia. A proposed export terminal and the 900-km Prince Rupert Gas Transmission pipeline project, which would be built, owned, and operated by TransCanada, were included in the plans.
The pipeline was to take natural gas from the Montney formation to the proposed liquefaction facility. The facility was to initially include two LNG trains of approximately 6 MTPA each, and a subsequent development of a third train of approximately 6 MTPA.
TransCanada's Prince Rupert gas pipeline may also be affected by the cancellation. The project was recently delayed as the National Energy Board was ordered by a federal court to reconsider provincial approval.
The project had already seen a hefty infusion of funding. Reuters reported that Petronas said it had made significant investments in the project along with its partners over the past 5 years, but declined to give a figure. The Malaysian state-owned firm took over Progress Energy in 2012 for USD 6 billion with the intent of increasing the availability of natural gas for the Pacific Northwest LNG project. TransCanada said it would be reimbursed for costs associated with the project, according to Reuters. It had spent CAD 500 million as of April. Japan Petroleum Exploration Co. said it would take a loss of about CAD 102 million.
Nigeria LNG Nears FID on Train 7 Project
After failing to meet a previous 2018 deadline, the owners of the Bonny Island plant say they are close to sanctioning the expansion project following the signing of a letter of intent to a consortium of Saipem Chiyoda and Daewoo for EPC services. Train 7 is expected to add 8 mtpa to Bonny Island’s
ExxonMobil Agrees To Sale of Norwegian Upstream Portfolio
ExxonMobil confirmed an exclusivity agreement with Var Energi for negotiations of a sale that could reach $4 billion, according to Reuters. If it goes through, the deal would make Var Energi the second-largest producer on the Norwegian Continental Shelf.
Novatek Sanctions Arctic LNG 2 Project
With a production capacity of nearly 20 mtpa, Wood Mackenzie says the project would be the largest single project to reach FID. Novatek plans to spend more than $21 billion to launch the project at full capacity. Startup is scheduled for 2023.
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