As a Malaysian living in BC, I was initially thrilled about of Malaysia`s entry into our LNG economy. It was a sign of Malaysian corporate prowess, our province as would benefit and and even the First Nations seemed potential beneficiaries. Since the 2013 however, the global LNG markets have slumped to record lows and it is even suggested by the Carbon Tracker Initiative that, given prevailing market conditions, supply from the PETRONAS’ Pacific NorthWest project will not be needed in the 2015 to 2035 period. In August 2015, Malaysian online business portal KINIBIZ was asking, “Why is PETRONAS pressing on with its controversial RM123 billion Canadian LNG project when it has admitted to having cash flow difficulties that could last indefinitely?” Concurrently, it is has being argued in BC, that the Provincial Liberals’ claims for LNG are unrealizable. These promises include 100,000 jobs, a CAD 100 billion Prosperity Fund, 150 years of gas supply, minimal water table impacts and an overall reduction of greenhouse gas emission. The bottom line here is that the much-heralded PETRONAS deal is so poor from the BC governments perspective, that it would add only about CAD 0.2 billion per year to the B.C. budget’s CAD 46 billion in revenues and total provincial debt of CAD 43 billion. This is because In hard negotiations with Petronas BC Liberals dropped export taxes from 7 per cent to 1.5 per cent. As Damien Gillis explains, ”I was in the room when Shamsul Abbas, then-CEO of Petronas, wagged a finger at British Columbians, threatening to pull up stakes if we didn’t slash public benefits and cut environmental ‘red tape’.” While this looks like a bad deal for BC, it also seems to be a deal that, given LNG market conditions, PETRONAS also may be unwilling to peruse at this time. As we wait for the Federal Governments decision on this project, I cant help thinking, ultimately it will come down to the bottom-line, you know, the money. Like old man Mahathir keeps saying of Malaysia … Cash is King! Sadly, I must agree, Malaysia or BC, clean or dirty … Cash is King! … Cash is King! Image from The Tyee
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