CEAA said to have given bleak review for Petronas’ LNG plant in Canada

A review by the Canadian Environmental Assessment Agency (CEAA), an independent body, has found that the liquefied natural gas (LNG) gas plant proposed to be built in Canada by Malaysian oil and gas company Petronas would have significant impact to the environment and requires major remedial measures, according to sources familiar with the report.

Canadian Prime Minister Justin Trudeau’s Liberal government has until October 2 to decide whether to approve the Pacific North West LNG export terminal in northern British Columbia.

Petronas and its partners have been waiting for about three years for a permit for the C$11 billion (US$8.35 billion) project, which depends on CEAA’s review.

The CEAA decides on whether a project would have minor or significant adverse environmental impact and what measures must be taken to allow it to go ahead, but it has not veto rights. Their review has concluded that the project, which is opposed by local environmental and aboriginal groups, needs significant remedial work to counter the environmental impact before it can be built, said the sources.

The report will be presented to the full cabinet by Canada’s Environment Minister, Catherine McKenna, with her recommendation as to whether it should go ahead.

Caitlin Workman, a spokeswoman for McKenna, said the cabinet would make a final decision. She declined to comment further.The CEAA said it was not in a position to comment immediately.

Spencer Sproule, a spokesman for the Petronas-led project, declined to comment on the report.

But Petronas may not proceed with the construction of the plant even if it is granted permission. The firm said in August that it would conduct a total review of the project before it commits to a final investment decision. Petronas has seen the global slump in crude prices squeeze finances, which make up a third of Malaysia’s oil and gas revenue.