This article first appeared in The Edge Financial Daily on October 3, 2018

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) announced that a final investment decision (FID) has been made by all partners for the liquefied natural gas (LNG) project, in which the national oil firm holds a 25% stake, in Canada.

Petronas via wholly-owned unit North Montney LNG Ltd Partnership owns 25% of the LNG export facility project, which reportedly costs some C$40 billion (RM129 billion).

The project is managed by LNG Canada Development Inc. It comprises a natural gas liquefaction plant and facilities for the storage and export of LNG, including marine facilities, said Petronas in a statement yesterday.

“The decision is a testimony of the strong collaboration among our partners and stakeholders who share the same aspiration of delivering long-term value via LNG, in line with our commitment to sustainable and responsible development of resources,” said Petronas president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin in the statement.

Other partners in the project include Royal Dutch Shell plc via affiliate Shell Canada Energy (40%); PetroChina Co Ltd via subsidiary PetroChina Canada Ltd (15%); Mitsubishi Corp via subsidiary Diamond LNG Canada Ltd (15%); and Korea Gas Corp, via wholly-owned subsidiary Kogas Canada LNG Ltd (5%).

It is a step forward for Petronas, who in July 2017 scrapped plans for another C$36 billion LNG project on Lelu Island, British Columbia with another group of partners.

The latest development raises hope that it may help pave the way for Petronas to kick-start the development of its massive shale gas reserves that the national oil firm acquired in the north-east of western Canada’s British Columbia province in late 2012.

To recap, Petronas paid C$5.7 billion to take over Toronto-listed Progress Energy Ltd for the acquisition that has added 212 trillion cubic feet of shale gas reserves to its list of assets. The shale gas reserves are double Petronas’ gas deposits based on current discoveries.

However, the development of the shale gas reserves has been shelved after the collapse of fuel prices worldwide on top of the large capital required.

Petronas’ investments in Canada through Progressive Energy would comprise three major components, including an LNG export terminal called the Pacific Northwest LNG project.

The other components are the development of a natural gas production field in the Montney region of north-east British Columbia and north-west Alberta, and the installation of a natural gas transmission pipeline, which connects the production field to the LNG export facility.

The Pacific Northwest LNG export facility, a joint venture with Progress Energy, is expected to cost between C$9 billion and C$11 billion, subject to the final scope of the project, according to Petronas’ previous statement.