This was in response to recent press reports which said that Petronas was close to pulling out of the project, following frustrations with the stance of Prime Minister Justin Trudeau’s climate-change priorities and the introduction of new uncertainties for the project.

The new federal Liberal government in Canada is toughening up environmental reviews of major energy projects as it strives to meet international commitments to reduce greenhouse gas emissions.

A Canadian newspaper had quoted sources as saying that Petronas was threatening to walk away if it didn’t get federal approval by March 31.

“The Canadian environmental impact assessment process for the PNW LNG project is still ongoing, following which a final report will be produced by the relevant agency to be submitted to the Canadian government for approval,” Petronas said in the statement.

“Petronas, together with the project shareholders, will review the said final report and evaluate conditions attached to the report to further determine their impact on the overall cost structure and schedule of the project,” it said.

“The outcome, reviewed together with the LNG market outlook and overall project commerciality, will be used to develop the proposal for an investment decision to be considered by the PNW LNG shareholders,” it said.

Petronas added that it would update with more information as and when necessary.

Petronas and its partners are seeking to build an LNG terminal on the Lax Kw’alaams territory on Lelu Island as part of the proposed Pacific NorthWest LNG project, in which Petronas has a 62% interest.

So far, Petronas has spent about US$12 billion (RM49.2 billion) on this project.

It has encountered multiple obstacles, including aboriginal and environmental movement opposition.

“If Petronas were to walk away now, it would lose an investment of about US$12 billion. Is Petronas willing to bite the bullet?” asked one oil and gas (O&G) analyst.

Another analyst said if Petronas were to walk away now, it would also be very difficult to find a buyer for the asset at this stage.

“I think it is important that Petronas makes a business decision on this project soon,” added the O&G analyst.

Last month, this project had received a mostly favourable assessment from the Canadian Environmental Assessment Agency.

The proposed facility will comprise an initial development of two LNG trains of about six million tonnes per annum (MTPA) each, and a subsequent development of a third train of six MTPA. It will liquefy and export natural gas produced by Progress Energy Canada in north-eastern British Columbia.

It was also given the green light by the British Columbia government in November 2014, and received conditional corporate support – or an FID – from Petronas and its partners in June of last year.

To recap, Petronas bought Canada’s Progress Energy Resources in 2012 in a deal worth US$5 billion that gave it shale gas properties in north-eastern British Columbia.

Since then, Petronas has sold equity interets in the company and its LNG assets to four partners, namely Japan Petroleum Exploration Co Ltd (10%), Petroleum Brunei (3%), Indian Oil Corp Ltd (10%), and China Petrochemical Corp (15%).

Earlier this month, Petronas group chief executive officer Datuk Wan Zulkiflee Wan Ariffin had acknowledged that Petronas was facing cashflow problems due to the prevailing low oil price environment, which necessitated its RM50 billion cut in capital expenditure and operating expenditure from this year up until 2020.

Between RM15 billion and RM20 billion worth of expenditure will be cut from the oil giant’s budget for this year alone, the bulk of which is likely to come from the upstream segment.

However, he reiterated that Petronas was committed to paying out RM16 billion in dividends to the Government from its operations last year as previously announced.