May 31, 2018 6:02 pm
Updated: May 31, 2018 10:34 pm

Premier John Horgan optimistic major LNG facility is coming to B.C. after Petronas investment

WATCH: Malaysia's Petronas announced Thursday it will buy a 25 per cent share of the LNG Canada project in Kitimat. Keith Baldrey has more on the impact expected here in B.C.

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B.C. Premier John Horgan is optimistic that energy giant Petronas investing in LNG Canada “bodes well for a final investment decision.” The Malaysia-based company has taken a 25 per cent equity stake in the proposed LNG facility near Kitimat in the northwest part of British Columbia.

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“I do know that LNG Canada is in the final stages of their final investment decision package that will go to the joint venture board this fall,” said Horgan. “You have all of the main players in the natural gas sector whether they be upstream producers here in B.C. or takers in Asia. I think that bodes well for a final investment decision.”

The Shell Canada-led mega-project is estimated to cost $40 billion and create 10,000 jobs at peak construction and 950 ongoing jobs. Last year, Petronas and its partners cancelled a proposed $36-billion Pacific NorthWest LNG project due to low LNG prices and a lack of demand.

READ MORE: B.C. government offers PST exemption for LNG facility construction costs

Since then, prices for LNG have gone up and there is greater demand for the product around the world. The B.C. facility plans to export a majority of the gas to Asian markets.

Earlier this year, Horgan’s government announced an overhaul of the fiscal framework for the liquefied natural gas industry in an attempt to secure a final investment decision from LNG Canada. The province announced that it will provide a PST exemption on construction costs of any LNG facility.

WATCH: NDP government offers billions in incentives to LNG industry

The government is projecting that would be a $6-billion rebate for LNG Canada, compared to the framework designed by the previous provincial government.

“We are working closely with the proponents to make sure we are doing everything possible to land this significant investment. But it needs to be done within the framework I laid out,” said Horgan. “We need to make sure there is a benefit for British Columbia and it’s consistent with our climate-change goals.”

READ MORE: LNG Canada committing to start construction on B.C. project this year

With Petronas’ 25 per cent equity share, LNG Canada now includes multiple investors. Shell Canada Energy has 40 per cent, PetroChina Canada Ltd. with 15 per cent, Diamond LNG Canada Ltd. with 15 per cent and Kogas Canada LNG Ltd with 5 per cent.

“Petronas is pleased to be part of the LNG Canada project. As one of the world’s largest LNG producers, Petronas looks forward to adding value to this venture through our long-term expertise and experience across the LNG value chain,” said Petronas president Tan Sri Wan Zulkiflee Wan Ariffin. “We are committed to deliver LNG and natural gas, the cleanest fossil fuel in the world, to the growing global energy market.”

© 2018 Global News, a division of Corus Entertainment Inc.

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