On July 13 2018, LNG Canada formally welcomed PETRONAS as their fifth Joint Venture participant. According to Energycity.ca “Petronas is now an official partner in the consortium that is proposing to build a $40 billion liquified natural gas export terminal in Kitimat”. Petronas subsidiary Progress Energy will take a 25 percent stake in the LNG Canada development, which is still subject to regulatory approvals. Shell will lead the consortium with a 40% stake. The other partners are PetroChina, Mitsubishi Corp. and Kogas Canada. As I noted in a previous post there are implications for national, trans-national relationships and intra-national relations. This investment will be closely aligned with the Coastal GasLink pipeline that TransCanada is building to transport the natural gas from Dawson Creek to Kitimat. Some members of the Wet’suwet’en nation of Canada have built a healing camp in the path of the pipeline. To acknowledge the changing scenarios in Malaysia and in BC I have changed the colours that brand this blog.
If PETRONAS goes ahead with its new LNG Terminal investment in BC, the Malaysian crown corporation will hold a 25% stake in LNG Canada’s CAD $ 40 billion project. This investment will be closely aligned with the Coastal GasLink
pipeline that TransCanada is building to transport the natural gas from Dawson Creek to Kitimat. A further enmeshment to note that much of the natural gas will come from PETRONAS’ own North Montney fields. All the parties involved in this set of developments, the corporations, the provincial government and the federal government have their eyes on the burgeoning Asian market for the LNG .
There remain, however, some unresolved and under reported conflicts with First Nations in connection with both the terminal and the pipeline. Although there are reportedly signed benefit agreements with 19 of the 20 First Nations involved, there is some entrenched opposition. Some members of the Wet’suwet’en Nation have built the Unist’ot’en healing camp in the path of the pipeline. So once again, the interests of the exemplary Malaysian bumiputra (indigenous) led enterprise is contrary to the those of a group of indigenous peoples from British Columbia.
Having given up its bid to lead BC LNG Terminal investments with a mega plant on Lelu island, PETRONAS seems unwilling to be left out. On the 31st of May 2018 PETRONAS owned Progress Energy announced that another PETRONAS wholly-owned entity, the North Montney LNG Limited Partnership (“NMLLP”), “has entered into a Purchase and Sales Agreement for an equity position in the LNG Canada project in Kitimat, British Columbia, Canada”. Pending regulatory approvals and associated agreements, the composition of ownership in this ‘LNG Canada’ project will be PETRONAS (through NMLLP), (25%); Shell Canada Energy, a subsidiary of Royal Dutch Shell plc (“Shell”), (40%); PetroChina Canada Ltd. (15%); Diamond LNG Canada Ltd., a subsidiary of Mitsubishi Corporation, (15%); and Kogas Canada LNG Ltd. (5%).
Before PETRONAS joined this consortium, Chris Newman of Energeticcity.ca, had reported that industry analysts consider the project to be a long shot. Yet in an even earlier article in Energeticcity.ca (also by Newman), B.C.’s Premier John Horgan, is reported to have said that the project will proceed “It has all of its permits in place, has social license from First Nations in the region, has the support of the community, and is waiting for economic conditions to turn around”.
On Friday, 20th October, a totem pole carved by Tsimshian artist Phil Gray of a wolf and an orca fin was ceremoniously erected on Lelu Island British Columbia to commemorate the victory of the resistance against the PETRONAS/ provincial government of British Columbia/ Federal government of Canada plans for a massive LNG terminal. According to Ian Gill in his article in the Tyee Gwishawaal Ken Lawson, a house leader of the Gitwilgyoots tribe said modestly, “It’s a small pole, but the wolf is here,” Ken Lawson jointly claims stewardship rights and responsibilities on Lelu Island with Simoyget Yahaan, Don Wesley for the Tsimshian First Nation. In the course of the proceedings, Don Wesley, who publically led the resistance to protect the island and the Skeena watershed, was presented with a copper shield by Guujaaw, the leader of the Haida Nation to acknowledge his resistance.
Reuters reports that PETRONAS profits have quadrupled (from RM 1.68 billion to 7.06 billion) because of higher oil prices and improved margins and as a result the amount paid to the Malaysian Government will rise from the previously committed RM 13 billion to 16 billion. The announcement of increased payments is timely for the Malaysian Government they have announced massive infrastructure projects in the run-up to the general election that must be called by mid-2018. PETRONAS recently cancelled its massive investment plans in British Columbian LNG industry and Reuters quotes PETRONAS CEO as saying that the corporation is “finalizing our strategy on how to monetize our North American gas assets. All options are being looked at.” It is of note that PETRONAS has absorbed other major losses in its world-wide LNG investments for instance the Australian Gladstone LNG Project For those involved with PETRONAS and its subsidiaries in Canada, it is surely of significance that this fortune 500 company is in fact a Crown corporation, potentially subject as much to global market forces as to domestic political imperatives.
According to Erin Ellis of the Observer a federal research scientist with the Geological Survey of Canada has claimed that his research proves that the largest earthquake ever detected in British Columbia’s northeastern shale gas region was caused by the fracking activities of PETRONAS subsidiary, Progress Energy Inc. This was a 4.6 magnitude quake that took place in the northern Montney Play of British Columbia in August 2015. The study analyzed the seismic activity its connection with fluid injection hydraulic fracturing being deployed in the region. Spatial and temporal correlation of seismic activity with the fluid injection in the region appears to have revealed that these events are better correlated with hydraulic fracturing than other types of injection. In other words the earthquake that was felt at the surface of the earth near the town of Fort St. John, was the direct result of liquids being pumped into underground rock formations under high pressure to extract natural gas.
According to Chris Hatch in the National Observer the aborted PETRONAS project which would have brought fracked natural gas by pipeline from B.C.’s interior, compressed it into a liquid for export by tankers from Lelu island near Prince Rupert, would have become one of the largest sources of climate pollution in Canada. Specifically, he cites Environment and Climate Change Canada’s assessment describing the Petronas project as becoming “amongst the largest single point sources of greenhouse gas emission in the country.” He also cites the Pembina Institute figures to claim that this project alone would have accounted for “75% to 87% of the emissions allowed under B.C.’s 2050 target.” British Columbians may, indeed, have just dodged a deadly environmental bullet.
Here is a timeline of the BC Liberals LNG affair with Malaysian Crown Corporation PETRONAS (via their subsidiary Pacific NorthWest LNG) as reported in the Vancouver Sun –
- Feb. 19, 2013: Pacific NorthWest LNG submits its project description to the Canadian Environmental Assessment Agency.
- April 29, 2013: Japan Petroleum Exploration Co. Ltd. buys a 10 per cent stake in Pacific NorthWest LNG and agrees to buy 10 per cent of the liquefied natural gas produced over at least 20 years, becoming the first secure buyer.
- Dec. 16, 2013: The National Energy Board grants Pacific NorthWest LNG a licence to export up to 22.2 million tonnes of LNG annually for 25 years. It had applied in July for a licence to export up to 19.68 million tonnes, beginning in 2019.
- Feb. 28, 2014: Pacific NorthWest LNG submits its environmental impact statement to the Canadian Environmental Assessment Agency.
- March 26, 2014: The federal government approves Pacific NorthWest LNG’s export licence.
- June 11, 2015: In what it calls its final investment decision, Pacific NorthWest LNG announces it will proceed with the project as long as it satisfies two conditions: approval of a project development agreement by the B.C. legislature and clearing the federal environmental assessment review process.
- July 21, 2015: The B.C. government passes legislation to ratify a project development agreement with Pacific NorthWest LNG.
- March 21, 2016: The federal government grants the Canadian Environmental Assessment Agency more time to review the project.
- Sept, 27, 2016: The federal government approves the project with 190 conditions, including for the first time a maximum cap on greenhouse gas emissions.
- Oct. 27, 2016: Two First Nations and an environmental group file separate applications for judicial review in Federal Court to quash approval of the project. A fourth challenge is launched in January 2017.
- July 25, 2017: Pacific NorthWest LNG says it will not proceed with the project, citing poor market conditions including a prolonged period of low LNG prices.
As I shift my attention from the now aborted PETRONAS investment on Lelu Island to the underlying and ongoing PETRONAS engagement with British Columbia’s LNG sector, I feel it necessary to reiterate my own history with Malaysia’s exemplary crown corporation. Indeed, while I have my doubts about the benefit of LNG extraction in the long duree, I also have a history with PETRONAS that I feel it is necessary to declare. I have worked for PETRONAS in the capacity of a guest curator in 2001-2002. Then director of the Galeri PETRONAS, Zainol Abidin Sharif (ZABAS) , kindly gave me a great opportunity to curate the first retrospective of the important Malaysian artist Sulaiman Esa. This project gave me the ability to develop my interpretative frame for the contemporary art of Southeast Asia. I had previously argued that to do justice to contemporary artistic practice and meaning, we must combine the study of Sacred Forms as developed by the likes of Nasr, Burkhardt and Coomaraswamy, this with the study of social history, and that, ultimately, we should look ‘Beyond Art History” for our interpretative approaches. Mainstream art history with its chronologies and detailed stylistic differentiation is not so relevant to us. Indeed it seems almost uninteresting given the depth of the alternative traditional aesthetic imperatives at play.
The exhibition I curated and wrote for at the Galeri Petronas was titled Insyirah: lukisan Sulaiman Esa dari 1980 hingga 2000. I am proud of this work, and am grateful to PETRONAS for supporting it and for all their contributions to Malaysian art. PETRONAS is a government corporation, so unlike Shell or Exxon, it has a natural obligation owed towards the nation as well as a natural loyalty owed in return by Malaysians. I feel that debt and I am proud of PETRONAS’ achievements in the corporate world. Generally, as a Malaysian I want to see them succeeded in all their ventures. However, as a person who makes his home and is bringing his children up in British Columbia, my concerns are more complex. This blog will continue to explore this particular nexus of interests, in the face of the events that are unfolding around me.
Image – Sulaiman Esa, “Doa / Supplication” (1999), Mixed-media, 114x66cm (Collection of Petronas Art Gallery) http://hasnulsaidon.blogspot.ca/2016/01/inter-connectivity-and-single-unified.html
While the Pacific Northwest LNG logo belies its PETRONAS connections, the more established Progress Energy logo proudly wears the PETRONAS green. In his announcement on the termination of the Lelu Island development, Datuk Anuar Taib
who is Executive Vice-President & Chief Executive Officer of Upstream PETRONAS, Chairman of Pacific NorthWest LNG and Chairman of Progress Energy made it clear how deeply established in and committed to Canadian natural resource development this Malaysian crown corporation really is – “Over the years, Progress Energy and its North Montney joint venture partners have developed a reserves and contingent resource of around 52 trillion cubic feet of natural gas reserves and resource in the North Montney assets. … we are positioning Progress Energy to be one of the top natural gas exporters in North America. That’s why we are moving our Unconventional Centre of Excellence from Kuala Lumpur to Calgary. The centre, which will house a network of technical experts with similar expertise, responsibilities and interests, will deliver operational innovations for PETRONAS worldwide unconventional gas plays with its core in Calgary.” Once again I find myself swelling with Malaysian Pride and, at the same time, shrinking fearfully at the realization that what we are talking about a monumental fracking operation in Canadian earth!