Petronas May Defer LNG Project

Alexander Winnifred Oct. 6, 2015

October 6, 2015 – Petroliam Nasional Bhd (Petronas) is likely to defer commercial operations of its Canadian liquified natural gas (LNG) project to 2022 or 2024 as the depressed oil and gas (O&G) prices continue to shroud earnings prospects, analysts said.

The Canadian project, the national oil company’s largest investment abroad, was expected to begin operations in 2019.

But low LNG prices with the Asian LNG slumping around 60% since 2014 to US$8 (RM34.99)/Mbtu is a cause of concern for Petronas.

Analysts said Petronas would require LNG prices to hover between US$11-US$12/Mbtu for the project to break even.

“But with (gas) prices as they are, many projects, not only related to Petronas, do not look viable,” an analyst at a securities research firm covering the O&G sector told The Malaysian Reserve (TMR).

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