Petronas' $11.5b LNG project in Canada gets a lift

A Petronas petrol station in front of the Malaysian state oil company's flagship Petronas Twin Towers in Kuala Lumpur.
A Petronas petrol station in front of the Malaysian state oil company's flagship Petronas Twin Towers in Kuala Lumpur.PHOTO: BLOOMBERG

VANCOUVER • Petronas' proposed C$11 billion (S$11.5 billion) liquefied natural gas (LNG) export plant in Canada is getting a boost as an aboriginal community signals openness to the project amid speculation that its location may be changed.

The Lax Kw'alaams Band, which opposes the current site in British Columbia, is optimistic it will be moved, said Mayor John Helin, whose community members endorsed compensation talks on the impact on their traditional land.

The group is set to meet soon with officials from the Pacific NorthWest LNG project and provincial and federal governments.

While the developer says the proposal has not been altered, an online message circulated among Lax Kw'alaams members this month states that the terminal would be placed at one of two sites farther north than now envisioned.

Local politics is shifting with Mr Helin's election in November after the band rejected C$1.15 billion in compensation in May last year, citing environmental concerns. In March, Mr Helin offered conditional support to Pacific NorthWest LNG in a letter to regulators.

"We have to look after the environment first, but we also have to look after the benefits side of things," Mr Helin said last Friday.

"Most of the First Nations communities in Canada are living in Third World conditions and in a country as prosperous as Canada, that shouldn't happen."

Petronas, the Malaysian state oil company, is joined by other backers including China Petroleum & Chemical, Japan Petroleum Exploration, Indian Oil Corp and Brunei National Petroleum.

About two-thirds of 812 Lax Kw'alaams Band members voted for continued talks about the project along British Columbia's north-west coast, provided the environment is protected, according to poll results last Thursday.

Some environmentalists, scientists and aboriginal community members oppose plans to build the terminal on an uninhabited coastal islet and locate LNG carrier berths, a trestle and a suspension bridge in nearby waters deemed crucial for juvenile salmon.

"We've been saying all along that we don't agree with the site," Mr Helin said, adding that he plans to raise the idea of an alternative venue at the upcoming meeting.

The online message to Lax Kw'alaams members identified two other prospective locations besides the current Lelu Island. Neither of those sites, Ridley Island or Nasoga Gulf, would be critical for salmon.

While denied by the project's backers, the information may have contributed to the vote in favour of advancing talks.

"Pacific NorthWest LNG's focus remains on Lelu Island as per our submission to the Canadian Environmental Assessment Agency," said Ms Tessa Gill, head of corporate and stakeholder relations for the project. 

The partners plan to review next steps after a decision by the government, she said.

"The project is continuing to work with area First Nations, stakeholders and regulators to minimise any potential impacts through mitigation measures and design optimisation," she added.

Prime Minister Justin Trudeau's government is poised to rule within the next month whether Pacific NorthWest LNG can move ahead.

The Petronas-led proposal is among almost two dozen being considered for Canada's Pacific Coast.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on August 30, 2016, with the headline 'Petronas' $11.5b LNG project in Canada gets a lift'. Print Edition | Subscribe