Pacific NorthWest LNG scrapped a proposed C$11 billion ($8.8 billion), two-train, liquefied natural gas export project slated for Port Edward, British Columbia.

PETRONAS and its partners said that changes in market conditions led to the decision.

Anuar Taib, chairman of the PNW LNG Board, said in a statement, “We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry have led us to this decision.”

The facility was planned to liquefy and export natural gas produced by Progress Energy Canada Ltd. in northeast British Columbia. The facility was proposed to be built on Lelu Island in the District of Port Edward, in northwest British Columbia. Pacific NorthWest LNG is majority-owned by PETRONAS.

In July 2013 PNW LNG applied to the National Energy Board of Canada for a license to export up to 19.68 million tons per annum (MTPA) of LNG for 25 years starting in 2019. The Board later approved a license allowing export of more than 22 MTPA.

Pipeline company TransCanada planned to build a pipeline to transport gas to the export facility. In a statement, it expressed disappointment with the decision to scrap the project, and said agreements will enable it to recover expenses incurred on its related pipeline project.

TransCanada said, "There is still a strong need for Canadian natural gas supplies to get to market, and the infrastructure we are building in Alberta and British Columbia - including recently announced multi-billion dollar investments in our NGTL system and North Montney Mainline - are designed to help move natural gas supplies to markets where they are needed."

PETRONAS and its North Montney Joint Venture partners said they "remain committed" to developing their natural gas assets in Canada and will continue to "explore all options" as part of its long-term investment strategy.

The North Montney Joint Venture is a joint venture between Progress Energy Canada Ltd., Japan Petroleum Export, PetroleumBRUNEI, IndianOil and Sinopec-China Huadian to develop the resources in the North Montney formation located along the foothills of the Rocky Mountains in northeast British Columbia.

Progress, a wholly owned unit of PETRONAS, is the operator of the joint venture, which has approximately 800,000 acres of mineral rights in the North Montney with more than 52 trillion cubic feet (tcf) of reserves and contingent resources, and over 15,000 identified drilling locations. Total gas initially in place is estimated to include more than 200 tcf of unconventional gas and liquids.