KUALA LUMPUR, Malaysia—Malaysia’s state oil company is considering delaying a Canadian liquefied-natural gas project over concerns about oversupply and cheap competing fuels, according to two people familiar with the matter.

Petroliam Nasional Bhd., known as Petronas, so far has put up roughly a third of the estimated $27.5 billion cost of the Pacific NorthWest LNG project in British Columbia, which will liquefy and export natural gas. The plan has been to begin commercial operations in 2019, according to the Pacific NorthWest...