Petroliam Nasional Bhd., Malaysia’s state-owned energy company, said most issues hindering its Canadian liquefied natural gas project have been resolved and a final investment decision will be made by the end of next month.
Chief Executive Officer Shamsul Azhar Abbas will travel to Vancouver tomorrow to meet with British Columbia officials to work out the “loose ends,” he told reporters today in Kuala Lumpur. The project is slated to start operations in 2018.
“We are going to sit down together and discuss firmly so that clarity is given,” Shamsul said. “We have the balance of one quarter of issues at hand. We reckon we can sit down and strike a solution.”
Petronas said this month it will work closely with British Columbia to ensure the project’s viability after the provincial government slashed by half a proposed levy on LNG terminals. The tax cut will have positive impact on the economics of the development known as Pacific NorthWest LNG project, the Kuala Lumpur-based company said Nov. 12.
Brent crude futures slumped to the lowest since 2010 after the Organization of Petroleum Exporting Countries refrained from cutting production when the group met in Vienna yesterday. Contracts for Jan. settlement fell 6.7 percent to $72.58 in London yesterday.
Oil tumbled into a bear market this year as the U.S. pumped the most in more than three decades, fueled by a shale boom, and conflict in the Middle East and Ukraine failed to disrupt supply.
Petronas reported a 14 percent drop in third-quarter profit today as crude oil prices weakened. Net income fell to 12.4 billion ringgit ($3.7 billion) in the three months through September from 14.5 billion ringgit a year ago. Revenue declined 1.3 percent to 80.4 billion ringgit.
Petronas may review its planned $300 billion-ringgit capital expenditure over five years because of falling crude prices, Executive Vice President Wee Yiaw Hin said this month. The spending plan was announced in 2011.
The British Columbia government granted environmental permits this week to Petronas’ LNG export terminal and the pipeline linking it to the inland gas fields, according to a statement from the Ministry of Environment. The project is also the subject of a federal environmental assessment, the ministry said.
Petronas sold a 15 percent stake in Pacific NorthWest LNG to China Petrochemical Corp., or Sinopec, in April. This followed earlier stake sales to Japan Petroleum Exploration Co., Indian Oil Corp. and Brunei National Petroleum Co. Petronas has said it aims to reduce its share in the development to as low as 50 percent.