Plans to construct a $36bn liquefied natural gas export facility in Port Edward, British Columbia have been shelved by energy giant Petronas.
A shift in market conditions is the reason given in a statement this week for its complete withdrawal from the high-profile Pacific NorthWest LNG project.
PNW LNG was approved by federal government last September but Petronas had withheld its investment against a backdrop of cost-cutting at the Malaysian company.
The decision represents a hit to Canada’s ambitions of becoming a leader in the export of LNG, an area in which the United States has enjoyed remarkable recent growth.
It was expected that the Lelu Island facility would have employed 4,500 workers during peak construction and brought in $2.5bn to federal, provicial and municipal governments through taxes and royalties.
Petronas will continue to explore opportunities in the area through its stake in the North Montney Joint Venture, a project looking at extractions in the Rocky Mountains.
“We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry have led us to this decision,” said Anuar Taib, Chairman of the PNW LNG Board.
“Petronas and its North Montney Joint Venture partners remain committed to developing their significant natural gas assets in Canada and will continue to explore all options as part of its long-term investment strategy moving forward.”