Malaysia's LNG Cancellation Threat

Study Released October 17, 2014

Natural Gas Report - September 2014

On September 25, 2014, Malaysia threatened to cancel the approximately 11 billion dollar Pacific NorthWest LNG project, of which it is a majority shareholder, on Lelu Island near Prince Rupert. The news came as a surprise because Pacific NorthWest LNG had been considered highly likely to go forward. The reasons given for potentially cancelling the project were as follows: the US was ahead on developing LNG, there were delays in Canada’s regulatory approval, and there were issues with British Columbia's (BC) LNG tax.1 Even though Petronas had said there were regulatory delays, it has surfaced that Petronas had requested to extend the environmental review process in order to modify some of the jetty plans for the Pacific NorthWest project.2 This announcement showcases that the future of Canadian LNG projects remains uncertain. To further complicate matters, Canada recently signed the Canada-China Foreign Investors Promotion and Protection Act (FIPA), a decision that has not been without controversy..... Download full report.

September 2014