Malaysia’s Petronas has made a $36 billion promise to invest in British Columbia’s liquefied natural gas plant and pipeline project – the largest foreign direct investment ever in Canada.
Canadian Prime Minister Stephen Harper was on hand in Malaysia on Sunday for the Asia-Pacific Summit where the announcement was made by Malaysian Prime Minister Mohd Najib.
B.C. officials had originally thought the investment would be in the neighbourhood of $19 billion when first discussed in June. This investment on the project’s construction may only be the surface of the economic boon to come.
According to B.C. Premier Christy Clark, liquid natural gas (LNG) could mean a trillion-dollar economic opportunity and the generation of 100,000 jobs. Its revenues could also play a major part in eliminating the province’s current $62 billion debt within 15 years.
As part of the investment, Petronas will build and operate the LNG terminal and processing facility at Prince Rupert. Natural gas extracted by Petronas-owned Progress Energy will be delivered to the city by a pipeline funded by Petronas and built by TransCanada Corporation. Petronas will also fund the completion of other ‘upstream’ activities like well drilling. The first Petronas LNG shipments from Prince Rupert to international markets are scheduled for 2018.
Further investments in B.C by Petronas, one of Malaysia’s largest state-owned enterprises, is strongly possible. The announcement in Malaysia over the weekend came after last year’s $6 billion investment by Petronas to purchase Calgary-based Progress Energy.
Harper continues to try to attract Asian markets for his goal of Canada becoming an “emerging energy super power” by tapping into its wealth of natural resources in an energy-hungry world. The investment by Petronas has not been welcomed by China’s state-owned natural resource companies which have also been looking to expand to Canada.
“Look, it’s no international secret that the rise of China and of Asia in the minds of all of us is likely to be one of the dominant realities of the coming century,” Harper said Sunday to the international press.
“Western countries certainly will have their place in the world — provided that we make good decisions.”
Speaking on what Najib termed as an “gargantuan” investment and a “significant landmark decision” by Petronas, it was a signal that “Malaysia is confident in the policies of the Canadian government and sees a wealth of opportunities in opening up the country’s energy industry to new markets.”
There is no word yet on the environmental impact of this project nor the studies that will be conducted about the impact of LNG extraction and transportation in general. However, last week the provincial government announced a $650,000 Kitimat study to investigate the potential air pollution impacts of the town’s proposed industrial developments which include an expanded Rio Tinto Alcan aluminum smelter, the Petronas LNG terminal and the highly controversial crude oil export facility.
The $6.5 billion Enbridge Northern Gateway pipeline project continues to be a hot environmental topic in B.C. The latest report indicates BC is not ready for oil spill prevention and response.
Image Source: Shell