Petronas CEO warns Canada against "severe fiscal and regulatory policies"

|By:, SA News Editor

British Columbia must avoid Australia’s policy missteps if it wants to establish itself as a source of liquefied natural gas for Asia, says Shamsul Azhar Abbas, the head of Malaysian national oil and gas company Petronas.

Australia introduced “severe fiscal and regulatory policies” that added to the cost of doing business and negatively affected project economics there, Shamsul says; "as a result, the anticipated second wave of investors shied away, and even current investors are scrutinizing project viability."

Chevron (CVX) and BG Group (BRGYY, BRGXF) are among energy companies that have been hit by cost overruns at their Australian LNG projects.

The Petronas-led C$36B Pacific Northwest LNG project won an export permit from federal regulators in December and is considered a front-runner from among a dozen gas export terminals proposed for Canada's Pacific coast; Shell-led (RDS.A, RDS.B) also appears to be in a lead position.

B.C. Premier Christy Clark says she is optimistic "one or two" LNG plants would be approved this year, including the Petronas-led project.