A major LNG export project in Canada ran into another delay on March 19 when the federal environmental assessment agency was granted an extra three months to finish an impact study.
Ottawa did though commit to announcing a final decision on the project this year, which would end a long-running saga for Malaysia's state-owned oil giant Petronas.
The firm and its partners have been waiting nearly three years for a permit to build the Pacific NorthWest LNG facility in northern British Columbia, on the Pacific coast.
News of the latest delay broke on Saturday, when federal Environment Minister Catherine McKenna agreed to the Canadian Environmental Assessment Agency's request (CEAA) for the extra three months.
The CEAA—which had been due to deliver its report to McKenna by March 22—said it needed more data from the project's backers after they handed over a series of documents and observations on March 4.
A spokeswoman for McKenna said the federal cabinet would announce a decision three months after the backers had handed over the requested additional information.
The ambitious plan to build Canada's first LNG export terminal faced challenges from the start, including controversy over its chosen site, which local aboriginal and environment groups said would destroy a critical salmon habitat.
It is also the first major project to have an environmental assessment completed under new rules that include the impact of upstream production on project emissions.
A spokesman for Pacific NorthWest did not immediately respond to a request for comment.
Petronas, battling a profit-sapping slump in prices that could produce heavy losses, can ill afford to splurge on future supply.
But neither can it afford a lengthy and inconclusive process with authorities in Canada, where the project is seen as a test of Prime Minister Justin Trudeau's green credentials.
Trudeau's Liberals came to power last November promising to do a much better job of protecting the environment than the previous Conservative government.
But the Liberals, who say Canada must cut emissions of greenhouse gases, are also under pressure to push through approvals of projects in the energy sector, which is losing jobs due to the slump in oil and gas prices.
"The agency has requested additional information from the proponent in order to determine whether the project is likely to cause significant adverse environmental effects," it said in the statement.
The request for more time to complete the impact study raises the prospect of more conditions on construction. This could simply make the project economically enviable, analysts say, leaving Petronas to write off billions already invested.
For Petronas, and Malaysia, the conditions have changed dramatically since it launched the project, long considered a front-runner among dozens proposed for British Columbia.
Gas prices are currently a quarter of 2014's peak. Last month, Petronas cut jobs and announced some $12 billion in spending cuts over the next four years—the same sum analysts estimate it has sunk into the Canadian project.
And Malaysia's economy too is cooling, dampened by China and a domestic financial scandal. Petronas is one of the country's biggest employers and accounts for nearly a third of the government's oil and gas-related revenue.
The stakes are also high for Canada, which is seeking to kick start the local LNG industry, said Wood Mackenzie analyst Chong Zhi Xin, speaking before the announcement on March 19.
But those ambitions come as Trudeau promises to transform Canada's environmental image. If built, environmental campaigners say the Petronas project would tarnish that. (US$1=$1.30 Canadian)
Recommended Reading
Enlight Renewable Energy Wins Funding for Serbian Wind Project
2024-03-27 - Enlight Renewable Energy said it received a $101 million loan for its second windfarm project in Serbia, which will help the country reduce its dependency on coal-fired power generation.
US Gives Final Green Light to Sunrise Wind Offshore Project
2024-03-26 - The approval by the Bureau of Ocean Energy Management solidified Ørsted and Eversource’s commitment to the project with both taking final investment decisions.
Bill Gates: ‘A Heroic Effort’ is Beginning, but Climate Goals Still Won’t be Hit
2024-03-26 - Bill Gates said during CERAWeek by S&P Global that the energy transition was picking up speed but still wouldn’t be able to achieve the climate goals established under the Paris Agreement of 2015.
Stonepeak Joins Shizen to Form Asian Onshore Wind Platform
2024-03-26 - Stonepeak will have an 80% interest in the onshore wind energy platform, with Japan-based Shizen retaining the remaining 20% interest.
Darbonne: Banksy, Climate Hubris and Life in the Anthropocene Epoch
2024-01-04 - As geoscientists look to define the Anthropocene Epoch, in which humanity is affecting the climate rather than merely being a byproduct of it, some are making the case more data might be a good idea.