C$36b INVESTMENT: National oil company hopes to export 19.68m tonnes of LNG per year for 25 years
AN export licence is the next important step for the Canadian unit of Petroliam Nasional Bhd (Petronas) to see its C$36 billion (RM111 billion) investment advance further.
Its unit, Pacific Northwest LNG, had in July applied to Canada's National Energy Board (NEB) for a licence to export up to 19.68 million tonnes of liquefied natural gas (LNG) per year for 25 years beginning 2019 from its proposed multi-billion dollar export facility in Port Edward, British Columbia.
The filing for the NEB export licence is regarded as "another important step to bring the tremendous opportunity into reality".
"We believe that the successful completion of our project will create long-term, multi-generational benefits for First Nations, northwest British Columbia, the province and the country as a whole.
"While we continue our work to reach a final investment decision in late 2014, we believe that our project has all of the key components of a successful world-class LNG development," said Pacific Northwest president Greg Kist in a statement.
Pacific NorthWest, which is owned through various subsidiaries by Petronas, plans to build three so-called trains, the cooling units where the liquefaction of gas occurs, on Lelu Island in the Port Edward district, south of Prince Rupert, British Columbia.
The site will be used to liquefy and export natural gas produced by Calgary-based Progress Energy Canada, which was bought by Petronas last year in a US$5.5 billion deal.
Since then, Petronas and Malaysia have shown commitment to further invest in the development of LNG in Canada.
Last Saturday, Prime Minister Datuk Seri Najib Razak announced that Petronas will invest C$36 billion over 30 years to build the energy plant that will cover the construction of upstream facilities, including a pipeline leading to the plant.
"I am told that it is the largest foreign direct investment in Canada by any country. This is a significant landmark decision by Petronas following a positive response from the Canadian government," Najib had said during a joint press conference with Canadian Prime Minister Stephen Harper, who was on a visit to Malaysia.
The Petronas takeover of Progress Energy triggered months of hand-wringing in the Harper's government over majority takeovers of Canadian companies by foreign state-owned enterprises.
The Canadian government eventually did approve the deals last year but at the same time introduced new rules that permit such takeovers only in the most exceptional circumstances.
Earlier reports said the proposed LNG facility will comprise an initial development of two LNG trains of about six million tonnes per annum (mtpa) each and a subsequent development of a third train of about six mtpa.
Petronas plans to invest between C$9 billion and C$11 billion to construct the first two liquefication units and C$5 billion on a 750km-long pipeline, to be built by TransCanada Corp, that will supply gas to the two units.
Pacific NorthWest will be supplied with natural gas sourced primarily from Progress Energy Canada's assets in northeast British Columbia.
Petronas, through its subsidiaries, will hold a 90 per cent interest in the project, with Japan Petroleum Exploration Co Ltd holding the rest.
The proposed facility is also expected to create up to 3,500 direct jobs during its construction stage. Once operational, the LNG facility will create 200 to 300 permanent full-time jobs.