Malaysia’s Petronas threatening to abandon LNG project over new climate change rules – by Claudia Cattaneo (Financial Post – March 8, 2016)

http://business.financialpost.com/

CALGARY – Malaysia’s Petronas is frustrated that Prime Minister Justin Trudeau’s climate-change priorities are introducing new uncertainty for its proposed $36 billion Pacific NorthWest LNG project in northern British Columbia and has threatened to walk away if it doesn’t get federal approval by March 31, according to a source close to the project.

The project, to be located on federal lands on Lelu Island near Prince Rupert, received a largely favourable assessment from the Canadian Environmental Assessment Agency (CEAA) last month, was greenlighted by the British Columbia government in November, 2014, and received conditional corporate support — or a final investment decision — from Malaysia’s state-owned company and its partners in June of last year.

But the new federal Liberal government is toughening up environmental reviews of major energy projects to regain “public trust” and as it strives to meet international commitments to reduce greenhouse gas emissions.

It said in January they would be subject to additional assessment on “direct and upstream greenhouse gas emissions.” A spokeswoman for CEAA said she would look into how the new requirements will impact Pacific NorthWest LNG.

After spending an estimated $12 billion to get the project to this stage, and having suffered multiple delays and setbacks, including aboriginal and environmental movement opposition, Petronas has conveyed to federal cabinet ministers it won’t accept additional hurdles.

“They have given Trudeau to March 31 to either approve it as it stands now or they are going to leave,” the source told the Financial Post. “They started off with the Conservatives, and the (environmental) standards are very high. They said OK we will meet those standards and they did in all the engineering and design of the project. This last greenhouse gas thing that Trudeau came up with really threw them for a loop.”

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