Malaysian state oil firm Petroliam Nasional Bhd is considering selling its majority stake in a $27-billion Canadian liquefied natural gas (LNG) plant, three people familiar with the matter said this week.
Petroliam Nasional, or Petronas, is weighing options for the project as its finances have been squeezed after crude oil prices have collapsed by more than 50 per cent since mid-2014.
Additionally, the economics of the project have been called into question as LNG prices for delivery into the main markets in northeast Asia have slumped more than 70 per cent over nearly the same time period.
Petronas was given the go-ahead for the project by the Canadian government earlier this week. It said then that executives would study the conditions imposed by Canadian authorities and conduct a review before deciding on next steps.
The project would be built on Lelu Island off Canada's pacific coast near the Alaska border, and would include a liquefaction facility, gas pipeline and upstream components. It is anticipated to produce up to 19.2 million tonnes per year of liquid natural gas, comprising about eight per cent of last year's global trade.
Petronas, asked about the potential sale on Friday, said it will not provide any additional comment.
The sources said Petronas has been considering a sale for months, after it became apparent that a Canadian approval was possible, but had yet to take a final decision.
Other options are also being considered, including putting it on ice, as finding a buyer in current market conditions would be difficult.
Petronas signed on for the project in 2012 through acquisition of Canada's Progress Energy. That year, LNG prices climbed as high as $18.17 per million British thermal units (mmBtu), but have fallen to $5.75 per mmBtu since then.
If suspended, the project would be put on ice until gas prices start turning around and Petronas is confident of securing long-term contracts at reasonable prices, said the sources, who declined to be identified as the negotiations are not public.
Petronas has minority partners for the project in China, India, Japan and Brunei. 

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