By Christopher Donville and Rebecca Penty
Oct. 6 (Bloomberg) — Petroliam Nasional Bhd., Malaysia’s state-owned energy company, said it may delay construction of its C$10-billion ($8.9 billion) Canadian liquefied natural gas project past 2030 unless proposed taxes are lowered this month.
The company, known as Petronas, needs the Canadian government and province of British Columbia to commit to lower taxes by the end of October to meet its mid-December target for a decision on the shipping terminal, Chief Executive Officer Shamsul Azhar Abbas said today in an e-mailed statement. The project is scheduled to start operating in 2018.
“In our last portfolio review exercise, the current project economics appeared marginal,” Shamsul said. “Missing this date will have the impact of having to defer our investments until the next LNG marketing window, anticipated in 10-15 years.”
Petronas and global rivals including Royal Dutch Shell Plc and Chevron Corp. are considering exporting gas from Canada’s Pacific Coast in liquid form to meet rising demand in Asia. They are pressing Canada’s westernmost province of British Columbia and the federal government for financial terms that would justify making multibillion-dollar investments.
Costs to develop liquefied natural gas, or LNG, are higher in Canada than elsewhere because of the tax proposals, pace of regulatory reviews and as local contractors charge more than in other countries, Shamsul said.
Tax Regime
Shamsul’s statement comes as British Columbia’s legislature prepares to start a new session today, during which the government has committed to finalizing an LNG-specific tax regime and also plans to introduce a policy on emissions from the shipping terminals.
British Columbia Premier Christy Clark is confident Petronas will decide to proceed with the project, known as Pacific NorthWest LNG, she said last week after meeting with Shamsul in Vancouver. The meeting followed similar warnings about the viability of the Canadian LNG project by Shamsul in an interview with the Financial Times of London.
Copyright 2014 Bloomberg.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 108,866 members that receive our newsletter.
Have a news tip? Let us know.
By Dimitri Rhodes Nov 7 (Reuters) – Belgian oil tanker company CMB Tech says it will focus on the fast growing market in India as it reported third quarter results...
In a bold move amidst Russia’s intensified rocket attacks on civilian ships and Ukrainian ports, Maersk has launched a new weekly container service into Ukraine, signaling resilience in the country’s...
By Robert Tuttle (Bloomberg) A tanker of Canadian crude was shipped from Vancouver to Alaska for the first time in at least 10 years as the recently expanded Trans Mountain pipeline...
Maritime and offshore news trusted by our 108,866 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
