March 9, 2016 / 5:18 AM / 2 years ago

Malaysia's Petronas says moving towards FID on Canada LNG project

KUALA LUMPUR (Reuters) - Malaysian oil and gas firm Petronas said on Wednesday it was still moving towards a final investment decision on a proposed liquefied natural gas project in Canada, following a newspaper report that it was threatening to walk away from the project.

Taxis refuel at a Petronas petrol station outside Kuala Lumpur, Malaysia, March 1, 2016. REUTERS/Olivia Harris

“Petronas, through its subsidiary Pacific NorthWest LNG, is proactively taking steps to mature the project towards its Final Investment Decision,” the state-owned firm said in a statement.

Petronas, along with its shareholders, will review the final report by Canada’s environmental regulator to determine its impact on the project’s cost structure and schedule, it said.

Canada’s National Post newspaper reported that Petronas, also known as Petroliam Nasional Bhd [PETR.UL], was threatening to walk away from the Pacific NorthWest LNG (PNWLNG) project over the review, which has dragged on from more than two years.

“The outcome (of the report), reviewed together with the LNG market outlook and overall project commerciality, will be used to develop the proposal for an investment decision to be considered by the PNW LNG shareholders,” Petronas said.

Canada’s federal Environment Minister Catherine McKenna is expected to release her final decision on the project later this month, assuming there are no further delays.

A draft environmental assessment released last month found that the project would not cause major ecological damage to the region, but would likely harm harbor porpoise populations and have an impact on climate change.

Petronas, the largest stakeholder in the PNWLNG project, is in slashing some 1,000 jobs and cutting its spending by roughly $12.0 billion over the next four years, as it struggles to deal with the impact of plunging oil prices.

Reporting by Emily Chow; Writing by Praveen Menon; Editing by Richard Pullin

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