KUALA LUMPUR (July 26): Petroliam Nasional Bhd (Petronas) said it and its partners have decided not to proceed with the proposed US$27 billion Pacific Northwest LNG project at Port Edward in British Columbia, Canada.

The decision, it said in a press statement today, was made after a careful and total review of the project amid changes in market conditions.

“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,” said Petronas' executive vice president and chief executive officer (upstream), Anuar Taib. 

“We, along with our North Montney Joint Venture partners, remain committed to developing our significant natural gas assets in Canada and will continue to explore all options as part of our long-term investment strategy moving forward,” he added.

Its partners in the now aborted project are China Petrochemical Corp, Japan Petroleum Exploration Co, Indian Oil Corp, and Brunei National Petroleum Co. 

Last August, Petronas said it was conducting a total review of the project with a decision to be made early this year on whether to proceed with it. A month later, the Canadian government finally consented to the project -- after over three years of regulatory reviews amid strong opposition from environmentalists and indigenous communities -- with a raft of environmental protection requirements.

If the plan had materialised, the facility that would have been set up would produce as much as 19.2 million tonnes a year of LNG and open up a new trade route for Canadian gas to be shipped to Asia, according to past news reports.

Nonetheless, Petronas said its commitment in Canada will continue through Progress Energy Canada Ltd -- which it bought for C$5.5 billion in 2012 to take control of its inventory of natural gas resources -- and that the subsidiary plays a key role in supporting the group's growth strategy in North America.

"Petronas and the project’s partners are thankful for the support received from everyone involved, especially the area First Nations, the District of Port Edward, the City of Prince Rupert and their communities for their invaluable involvement and efforts in the project," the statement further read.