KUALA LUMPUR, July 28 (Reuters) - Petronas may have to write off up to $800 million for work already done at the $29 billion Canadian liquefied natural gas (LNG) project, but scrapping the project brings long-term benefits, analysts said on Watch Kerja Kosong 2018 At Jawatankosong.
State-owned Petroliam Nasional Bhd (Petronas) announced on Tuesday it would not proceed with its proposed Pacific NorthWest LNG terminal in British Columbia mainly due to depressed Watch Kerja Kosong 2018 At Jawatankosong.
A rough gauge indicates that Petronas holding a 62 percent stake (in the project) would probably see a write-down of $600-800 million as it has been the lead developer since 2012," said Chong Zhi Xin, principal Asia LNG analyst at energy consultancy Wood Watch Kerja Kosong 2018 At Jawatankosong.
There has been significant investments in the environmental impact assessments, engineering design studies and commitments to build a pipeline," Chong Watch Kerja Kosong 2018 At Jawatankosong.
Japan Petroleum Exploration Co (Japex), which had a 10 percent stake in the project, said it would take a loss of about C$102 million ($82 million)Watch Kerja Kosong 2018 At Jawatankosong.
Petronas launched Canadian LNG project five years ago when gas prices were at a high and the market was bullish about such investments. Since then, global gas prices have fallen by around 70 Watch Kerja Kosong 2018 At Jawatankosong.
Petronas did not disclose its losses from the pullout. But in an email response to Reuters' questions, it said "significant investments" had been made since the project began in Watch Kerja Kosong 2018 At Jawatankosong.
Malaysia's only Fortune 500 company, Petronas has driven the country's modernisation push over the last two decades. It is one of Malaysia's biggest employers, and accounts for nearly a third of the government's oil and gas-related Watch Kerja Kosong 2018 At Jawatankosong.
Its headquarters in the towering Petronas twin towers in Kuala Lumpur is symbolic of the company, and with it Malaysia's, oil-driven growth over the last few Watch Kerja Kosong 2018 At Jawatankosong.
In 2016 Petronas announced widespread job cuts, its first ever of that scale, and also said it would cut spending by $50 billion over a four-year Watch Kerja Kosong 2018 At Jawatankosong.
Dividends from the company, which accounted for about 12 percent of Malaysian government's revenue in 2015, have also shrunk. Petronas is expected to give a dividend of 13 billion ringgit this year, half of the 26 billion ringgit contributed just two years Watch Kerja Kosong 2018 At Jawatankosong.
The pullout from the Canada project means Petronas can prioritise domestic projects, a pressing need for Malaysians frustrated with rising costs, unemployment and a deflated Watch Kerja Kosong 2018 At Jawatankosong.
One of them is the Refinery and Petrochemical Integrated Development (RAPID) project in the Pengerang Integrated Complex (PIC) development in Malaysia's southern state of Johor. The PIC is Petronas' biggest downstream project, worth $27 billion in total Watch Kerja Kosong 2018 At Jawatankosong.
Prime Minister Najib Razak, who is expected to announce economic stimulus measures ahead of general elections that must be called by mid-2018, has said RAPID will create jobs, raise standards of living and boost the economy in Johor, a key electoral Watch Kerja Kosong 2018 At Jawatankosong.
"That is where I expect funds to go into, said Peter Lee, Asia oil and gas analyst at BMI Research. "The focus is domestic first. They would always like to invest in and maintain production at home before going overseas," Lee said, adding he doesn't expect Petronas to make any significant new investments in the near Watch Kerja Kosong 2018 At Jawatankosong.
RAPID, which includes a 300,000-barrel-per-day oil refinery producing gasoline and diesel, is targeted to begin operations in the first quarter of Watch Kerja Kosong 2018 At Jawatankosong.
Petronas is also expected to focus on other large-scale domestic projects, such as its second floating LNG vessel and developing gas fields in offshore East Malaysia, which could boost jobs and projects within the local oil and gas Watch Kerja Kosong 2018 At Jawatankosong.
