This article first appeared in The Edge Financial Daily, on March 10, 2016.

KUALA LUMPUR: Canada’s new climate change priorities have added more uncertainties to Petroliam Nasional Bhd’s (Petronas) massive investment in shale gas project in northern British Columbia (BC).

Petronas, which has so far invested C$12 billion (RM36.89 billion) to acquire the shale gas reserve, is said to be subject to the new federal Liberal government policy introduced by recently elected Prime Minister Justin Trudeau, Canadian-based newspaper Financial Post reported on March 7.

The newspaper quoted sources saying that Petronas might opt for abandoning the Pacific NorthWest Liquefied Natural Gas (PNW LNG) project should the federal government not grant its approval by end-March.

In response to the news report, Petronas has issued a statement to reveal that the national oil firm and other stakeholders have yet to make the final investment decision on the project.

It said through its subsidiary Pacific NorthWest LNG, it is “proactively taking steps to mature the project towards its final investment decision”.

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

“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,” the statement wrote.

PNW LNG is a proposed natural gas liquefaction and export facility on Lelu Island near Prince Rupert Port in BC province, western Canada. The facility would liquefy and export natural gas produced by Progress Energy Canada Ltd in northeast BC. Petronas is the majority owner of PNW LNG and Progress Energy.

The other stakeholders of the project comprise China Petroleum and Chemical Corp (also known as Sinopec Ltd), Japan Petroleum Exploration Co Ltd, India Oil Corp Ltd and state-owned Brunei National Petroleum Co Sdn Bhd.

Prior to this, Petronas had already encountered opposition from aboriginal and environmental groups there.

In February, Petronas received a favourable assessment from the Canadian Environmental Assessment Agency (CEAA) after getting the nod from the provincial government in November 2014.

CEAA, in its draft report, concluded that the project would likely cause significant adverse effects on harbour porpoise as a result of greenhouse gas (GHG) emissions but was “not likely to cause significant adverse environmental effects taking into account the implementation of key mitigation measures”, according to the Financial Post.

The Canadian publication reported that Trudeau’s government was “toughening up environmental reviews of major energy projects to regain public trust” while trying to meet international commitments on GHG emissions.

The turn of events comes on the heel of Petronas’ announcement of cutting RM20 billion in capital and operating expenditure until 2020, and a reduction in workforce by 1,000 last week to cope with the global oil rout.

Petronas also said part of its business strategy would involve deferring some of its projects but did not specify details.