Canada resumes environmental review of Petronas-led LNG project

The Petronas fuel station sign is seen at a petrol station outside Kuala Lumpur, Malaysia, March 1, 2016. REUTERS/Olivia Harris

VANCOUVER (Reuters) - The environmental review of a Petronas-led liquefied natural gas project in western Canada has resumed, starting the clock on a final three-month extension granted by the federal government, Canada’s environmental regulator said on Monday.

Petronas [PETR.UL] and its partners have been waiting about three years for a permit to build the Pacific NorthWest LNG export terminal in northern British Columbia. The review process was last paused in March when the regulator requested more information from the company.

The Canadian Environmental Assessment Agency posted the company’s 271-page response online on Monday, saying it “satisfies the information request.” The agency now has three months to complete its review.

Canada’s ruling Liberals have separately committed to announcing their final decision on the project by the end of September, eliminating any further delays.

Long considered a front-runner in the race to build Canada’s first LNG export project, the consortium behind Pacific NorthWest pledged last June to start construction as soon as it was approved by regulators, eyeing the end of 2015.

A year later, the environmental review is still underway and LNG prices have plunged, hurting the economics of the $35 billion project. In April, the then-head of Pacific NorthWest LNG said the company hoped to have a final investment decision by late summer or early fall.

Reporting by Julie Gordon in Vancouver and David Ljunggren in Ottawa; Editing by Leslie Adler