Petronas-led Pacific NorthWest LNG venture announced that the C$36 billion ($29 billion) project will not be moving forward. “The decision was made by the project partners following a total review of the project amid changes in market conditions.” The venture will complete its outstanding business commitments by the end of September. "Our Prince Rupert and Port Edward offices are scheduled to be closed effective August 25, 2017.”
The 12 MMT/Y Pacific NorthWest LNG project was the front-runner in a race to build LNG export facility off Canada’s West Coast. “Pacific NorthWest LNG had good chance to be launched in 2014 when Shamsul Abbas was chairman and CEO at Petronas as he was keen to sign the FID on a large scale project before his retirement in Apr. 2015,” Mosi Nabi , Senior Consultant at Global LNG Info said, noting that “Petronas’ new management has obviously understood that the Canadian LNG project is not commercially viable in the current oversupplied market condition accompanied by the local difficulties.”
In May 2014, Shamsul said that “Petronas and its offtake partners plan to come to a final investment decision before the end of this year and he [had] hoped to return in a year’s time to report on the progress of construction of the project.
However, 5 months later, the Malaysian state-run company's former CEO warned that Pacific NorthWest LNG venture “will be delayed by up to 15 years unless tax and regulatory issues are resolved by month’s end.” “In order to remain competitive, Petronas needs to secure consensus on key principles vital to the success of this project by the end of October,” he had said in a statement in October 2014. “Missing this date will have the impact of having to defer our investments until the next LNG marketing window, anticipated in 10-15 years.”
Pacific NorthWest LNG filed its environmental impact statement in February 2014 and after 31 months, in September 2016, Canadian federal government announced that the Petronas-led project was approved for an environmental certificate, ending a long wait for a decision and drawing condemnation from environmentalists.
However, a hard concision set on the project which would require it to reduce emissions by 20% as the project’s carbon emissions should be capped at 4.3 MMT of CO2 and the Malaysian operator had to shave 900,000 MMT of CO2 from the project’s initial emissions forecast. “It may mean that Petronas will have to scale the 12 MMT/Y LNG project back or divide it to 2-phase.”
The decision to cancel Pacific NorthWest LNG is the latest setback for Canada's energy industry, already bruised by international oil firms selling off around $23 billion in Canadian energy assets this year alone, Reuters reported, adding that of more than a dozen projects proposed for British Columbia, only the C$1.6 billion privately held Woodfibre project has so far been given the green light by its developers. Last July, Shell and partners pushed back a final investment decision on their proposed LNG Canada project, citing global industry challenges.
Meanwhile, one of the Pacific NorthWest LNG venture’s partner, Japex has said that it would take a loss of about C$102 million ($82 million) due to the scrapping of the project and TransCanada, which was contracted to build the pipeline connecting feedgas to the LNG export facility, said it will be reimbursed for costs associated with the project as it has spent C$500 million by April 2017.
Pacific NorthWest LNG project’s shareholders are: Petronas (Progress Energy) 62%, Japex 10%, Petroleum Brunei 3%, Indian Oil 10%, Sinopec 10% and China Huadian 5%.

Backgrounds:

On 14 Apr. 2016, Petronas-owned Progress Energy revealed that it is drastically cutting its spending on the Pacific NorthWest LNG project’s upstream works from $5 billion over the next three years to $500 million in the next two years as it awaits a decision on the project. The company has spent $5-billion proving wells in the Montney over the past three years.
Updates:

On 29-Jan-2018, Japex reported that it will book a $608 million impairment loss on the shelved Pacific Northwest LNG project for the October-December quarter as the Japanese company re-examines the value of its Canadian shale gas asset based on a revised development plan. The previous plan to develop the LNG project has been cancelled.
Japex has a 10% stake in the shale gas project in the North Montney region of British Columbia, which produced an average 577 MMCF/D of gas in 2016 for sales in the western Canadian market at very low prices.
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