Petronas says it ensures safety at operations

WATCH: The province responds to a report that looks at the poor safety record of a company that wants to build a major LNG project in B.C. Keith Baldrey looks at what impact the Petronas report will have on plans for the mega-project in our province.

VICTORIA – Malaysian energy-giant Petronas says it introduced a program to improve health and safety at its global oil-and-gas operations following an audit that reported serious safety issues at its offshore operations.

The state-owned company said in a statement issued Friday that a 2013 asset-integrity audit, initiated to improve best practices, included recommendations to enhance safety standards.

Wee Yiaw Hin, the company’s executive vice-president, said the audit prompted the company to implement its ongoing safety-focused program.

“We acknowledged the gaps identified in the report and we have executed a comprehensive program to resolve the issues and ensure the safety of our people, environment and our facilities,” he said.

The audit reported competence and training issues with employees and made numerous references to corrosion threatening the structural integrity of facilities.

Pacific NorthWest LNG, of which Petronas is the majority backer, plans to build a $36-billion liquefied-natural-gas export plant and terminal at Lelu Island, near Prince Rupert on British Columbia’s northwest coast.

Last July, the B.C. government passed its Liquefied Natural Gas Project Agreements Act. The law intends to give potential LNG investors, including Petronas, certainty from targeted tax increases and environmental regulations.

The government said the law gives Petronas a 25-year, assurance-specific LNG-related income and ensures environmental taxes do not increase, although corporate and sales taxes could rise.

In exchange, the project is expected create up to 4,500 construction jobs and generate billions of dollars in revenues, the government said.

B.C.’s Natural Gas Development Minister Rich Coleman was not immediately available to comment on the Petronas audit and how it relates to the proposed Lelu Island development.