It’s not a verically integrated proposal. They have to buy LNG, convert it and sell it to a market. That is a disadvantage compared to what Petronas is proposing, who own their own naturla gas supply, and as a state corp. don’t have many investors poking their nose in to company business (voters tend to be the last to know).
You are 100% correct on that. This is why the Petronas project has always been considered the most “viable” project for the Prince Rupert Area, despite it being announced after the BG Group put forth their Ridley Island LNG ideas.
Petronas can use this LNG terminal to supply their own state-demand natural gas in Malaysia. Furthermore, they have also secured ownership partnerships with SINOPEC (China) at 15%, JAPEX (Japan) at 10%; Indian Oil Corp (India) at 10% & Brunei Petroleum (Brunei) at 3%. The deals include purchase agreements with each agreeing to buy LNG at the percentage of ownership, with options to purchase more from the Petronas/Malaysian share at Petronas’ discretion.
With the 5 owners, the Lelu Island project already has a built in customer base in Malaysia, China, Japan, India & Brunei…this is something that did not exist with the BG Group project…and is a huge reason why industry experts expect the Petronas project to move forward. Really, only 3 projects proposed in BC have foreign deals in place (LNG Canada in Kitimat, PNW LNG in PR and the smaller one proposed for Squamish).
We shall see, by the end of the year (or sooner) we will know for sure.
If just the Petronas project goes forward, that alone will be the biggest invested project Prince Rupert has ever seen, more than all of our previous and existing industrial projects (Fairview, PRG, Ridley Coal, Pinnacle, Pulp Mill ect) combined by a wide margin.