Petronas’ Canada project in jeopardy as Liberals win British Columbia

natural gas plant petronas

VANCOUVER: The prospect of a minority Liberal government in British Columbia heightened economic uncertainty on Canada’s west coast on Wednesday, pitting the future of key energy projects against the ability of the Liberals to work with the third-party Greens.

Preliminary results showed the ruling right-of-center Liberals squeaked to victory with 43 seats but were one seat shy of a majority. The left-leaning New Democratic Party (NDP) took 41 seats.

Absentee votes still need to be counted, a process that will take until May 24 and could change the outcome.

The province’s nominal leader, the lieutenant governor, has requested the Liberal Premier Christy Clark continue to govern.

To keep power, the energy-friendly Clark needs to woo the tiny environmentalist Green Party, as she tries to push forward with pipeline expansion plans and liquefied natural gas (LNG) projects.

The Greens, which have three seats, could also ally with the NDP to form a majority, resulting in an administration unfriendly to energy development.

“In our view, the most immediate casualty could be the Kinder Morgan Trans Mountain Expansion,” Dejardins analysts said of the C$7.4 billion (RM23 billion) federally approved pipeline project through British Columbia that both NDP and the Greens oppose.

George Hoberg, professor of environmental and natural resource policy at the University of British Columbia, said the situation could create uncertainties and makes building the project politically difficult.

“Constitutionally, the federal government might have the upper hand … but the BC government could force significant delays,” he said.

Kinder Morgan’s Canadian unit said in a regulatory filing on Wednesday it is looking to raise up to C$1.75 billion in an initial public offering to fund Trans Mountain.

When asked whether Kinder Morgan is concerned about the British Columbia election, President Ian Anderson said its pipeline project continues to move forward.

The Canadian Association of Petroleum Producers industry lobby group, whose members depend on export routes such as Trans Mountain, said: “We’re prepared to continue to advocate for our interests.”

British Columbia is home to numerous pending LNG export terminals whose fates have now become uncertain, such as one US$27 billion project of Malaysia’s Petronas for which NDP leader John Horgan has expressed reservations. The Greens have been against such projects.

“LNG project approvals would be easier for the province to unilaterally reverse,” compared to federally approved pipelines, Hoberg said.

The BC LNG Alliance industry group said its members remain committed to their projects and look forward to working with the new government.