Petronas and its partners hope to make a final decision within months on whether to build what could be Canada's first LNG export project, though further delays to the environmental review could push that timeline back, the project chief said late on April 28.
"Depending on the timing of the CEAA (Canadian Environmental Assessment Agency) decision, we would hope that by late summer or early fall we would be in a position to follow up on [a final investment decision]," Michael Culbert, president of Pacific NorthWest LNG, said in a phone interview. Petronas, Malaysia's national oil and gas company, owns a 62% stake in the company.
Long considered a front-runner in the race to build Canada's first LNG export project, the consortium behind Pacific NorthWest pledged last June to start construction as soon as it was approved by regulators, eyeing the end of 2015.
But nearly a year later, the environmental review is still underway and LNG prices have plunged, hitting project economics. And Petronas has said it plans to cut spending by roughly $12 billion over the next four years, as it deals with the impact of lower oil prices.
Culbert was speaking ahead of senior management changes announced on April 29 by Pacific NorthWest and Progress Energy Canada Ltd., another Petronas subsidiary.
Petronas Vice President Adnan Zainal Abidin, who has decades of construction experience, will take over as president of Pacific NorthWest.
Culbert will remain as CEO of Progress Energy Canada, the company's upstream arm, while also taking on the new role of Petronas' Country Chair for Canada.
Culbert said whether the project goes ahead or not depends largely on final conditions imposed by Canada's environmental regulator.
"It's fair to say that some of the conditions were not realistic for a construction project of this magnitude," he said, referring to a draft review released in February. He noted that the final measures would need to be carefully weighed before a decision could be made.
Pacific NorthWest is now working to answer the regulator's final round of questions and Canada's ruling Liberals have pledged that once addressed, the company would have its decision within three months.
"As a human, we all want to see the finish line from time to time. This finish line has continued to be somewhat evasive for us," Culbert said.
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