Pulling plug on PNW LNG deal may have greater ramifications

YOU can hear a loud heave of relief echoing across the globe when Malaysia's national oil company (NOC), Petronas announced on Wednesday the decision to pull the plug on the C$36 billion (S$39.1 billion) Pacific NorthWest liquefied natural gas (PNW LNG) project in Canada's British Columbia province.

If voices from the ground are anything to go by, the government of Prime Minister Najib Razak will also be looking forward to the NOC diverting the investments in PNW LNG back to Malaysia ahead of a national election.

The jury is still out, though, on how holding back this mega project may impact Petronas' and Malaysia's standings in the global LNG trade going forward. Petronas has blamed it on an "extremely challenging environment" and the "prolonged depressed (LNG) prices". These are not new considering LNG spot prices in Asia have been trading at about half that of the peak levels for years now.