Petronas's CEO has issued another warning to the Canadian and B.C. governments that plans for a multibillion-dollar liquefied natural gas facility in northwestern B.C. are in peril.
Shamsul Azhar Abbas has set a deadline of the end of October for the company to reach an agreement with government officials on ways to reduce the cost of the project.
"Missing this date will have the impact of having to defer our investments until the next LNG marketing window, anticipated in 10-15 years," he said in a statement released Monday.
Abbas said he was encouraged by commitment expressed by B.C. Premier Christy Clark to the company's Pacific Northwest LNG project during recent meetings in Vancouver.
Abbas repeated his concerns about the viability of the project, however, as the company prepares to make a final decision in December on whether to build it.
Petronas CEO Shamsul Azhar Abbas says his company must have an agreement on taxes, and labour costs by the end of the month, or a Massive LNG project in B.C could be delayed by as much as 15 years (Bazuki Muhammad/Reuters)
"The reality of the global LNG market is that we are facing potential overhang and decreasing demand that creates downward pressure on LNG prices," his statement said.
Abbas reiterated his concerns about a new LNG tax in B.C., and what he calls a "high cost environment."
"The proposed fiscal package and regulatory pace in Canada threatens the global competitiveness of the PNW LNG project," he wrote.
Abbas singled out the cost of hiring local labour as another barrier, suggesting hiring local workers would prove costly, as wages are not "benchmarked to global contractor's cost."
Just last week, the B.C. premier criticized the federal government for what she called "tragically misdirected" policies on temporary foreign workers. Clark has said thousands of skilled labourers are needed for future LNG projects.
Abbas has been critical of Canadian authorities before. Last month he told the Financial Times he was ready to call off the B.C. project, and described the Canadian LNG landscape as one of "uncertainty, delay and short vision."
Following those comments, B.C. NDP Leader John Horgan accused Abbas of negotiating in public.
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