Analysts are projecting that Malaysian LNG giant Petronas will likely defer commercial operations of its Canadian LNG developments until 2022 or 2024, as the depressed oil and gas prices continue to make earning prospects seem murky – as reported by The Malaysian Reserve.

This project, the largest abroad investment of it’s kind, was expected to begin operating in 2019.

But low LNG prices are causing concerns, the newspaper writes – Analysts are saying Petronas would require LNG prices to hover between US$11-US$12/Mbtu for the project to break even.

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The Asian LNG prices have been slumping and right now it is US$8.

However, the Malaysian Reserve reported that an analyst at a local investment bank said,”A delay (for the Canada project) is likely. Deferring the project to 2022 or even 2024 would be “less costly than completely exiting the project.”

“Pausing for a while and then restarting when conditions improve isn’t a bad option,” an analyst said.”With additional capacity coming onstream, there is really no rush for Petronas to complete the Canadian project.”

They also say analysts believe Petronas may look for additional partners to reduce its spending for the project but retain its majority control of the asset.

In Canada, the project is still developing in the face of opposing forces trying to slow it down.

On September 18th, the Lax Kw’alaams First Nation said it was making an aboriginal title claim on Petronas’ LNG export facility location at Lelu Island, to prompt the government to seek its consent for the project.

Earlier in May, the First Nation voted against a US$1.15 billion offer from Pacific NorthWest LNG in exchange for support for the project.


Pacific NorthWest president Michael Culbert told investors on August 25th that he was ‘frustrated’ with the delays in the Canadian Environmental Assessment Agency review, having taken almost two years to be completed.