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The death of the LNG project follows an exodus of international companies from Alberta’s oil and gas sector for the same reasons: high costs (including carbon taxes) and slow regulatory processes compared to competing jurisdictions.

The capital flight is rightly worrying the Canadian Chamber of Commerce. President Perrin Beatty, in a letter Tuesday, asked Prime Minister Justin Trudeau to find ways to cut business costs to offset the impact of an emissions plan that includes a minimum carbon price beginning next year. “The cost of doing business in Canada is rising,” Beatty said in the letter, which was also sent to the country’s provincial premiers.

Petronas isn’t leaving Canada — for now. It has invested about $11 billion out of the $36 billion so far, including $10 billion to purchase Progress Energy Corp. and to drill for gas in the Montney, $400 million to develop the export terminal site near Prince Rupert, and another $500 million for planning to build a pipeline.

“We continue to believe that an LNG industry can thrive in British Columbia with the right project at the right time,” Anuar Taib, chairman of the Pacific NorthWest LNG board of directors, told reporters. “Our experience tells us that the development of the LNG business requires a long-term view of the market, world-class natural gas resources, competitive project cost and supportive market conditions.” But there is no going back on the LNG decision, he said, and all options will be looked at to monetize and develop the resource.

The company said it hasn’t locked up deals with U.S. LNG export facilities. Don’t be surprised if that’s where Petronas — and partners Japex, Petroleum Brunei, Indian Oil Corp. and Sinopec — end up shipping their B.C. Montney gas, instead of through the terminal they wanted to build on the much-closer B.C. coast, leaving less money on the table for Canadian governments with big expectations.

Financial Post

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