Petronas-led group signs pact on $30 billion Canada LNG project

CHRISTOPHER DONVILLE

VANCOUVER (Bloomberg) -- British Columbia and a group of companies led by Malaysia’s Petroliam Nasional Bhd. reached a preliminary deal on taxes and royalties for a proposed C$36 billion ($30 billion) liquefied natural gas project.

The government and Petronas-led Pacific NorthWest LNG said the memorandum of understanding sets a path toward forging a final investment decision on the project.

“What you’re looking for as a proponent is long-term certainty,” Michael Culbert, Pacific NorthWest’s president, told reporters today in Vancouver. “It’s a locking down of the existing legislation, the existing royalty regime.”

The agreement unveiled Wednesday at a press conference in Vancouver is a step forward for Pacific NorthWest, one of 19 LNG projects proposed in British Columbia to chill and ship western Canadian natural gas to growing energy markets in Asia.

Last week, a British Columbia aboriginal community rejected almost $1 billion in compensation from Pacific NorthWest, a setback for the project. The Lax Kw’alaams band, whose ancestral lands overlap the site of the gas shipping terminal planned by Pacific NorthWest voted to reject the project.

Cuthbert said Pacific NorthWest was working to resolve the Lax Kw’alaams concerns about potential environmental damage associated with the project’s construction.