MALAYSIAN PM TOUTS $36B LNG PROJECT
State-owned Petronas eyes pipeline, gas plant
Bali, indonesia • Stephen Harper arrived for a summit of Asian leaders Sunday with economic momentum, following an announcement that Malaysia’s state-owned energy giant, Petronas, plans what its prime minister termed a “gargantuan” investment of $36-billion in Canada.
Petronas plans to build both a liquefied natural gas plant and fund the building by a Canadian company of a pipeline from the plant, Malaysian Prime Minister Najib Razak said Sunday. This investment will be in addition to the nearly $6-billion that Petronas paid last year to purchase Calgary-based Progress Energy Inc.
“I am told this is the largest direct investment in Canada by any country,” Mr. Najib said at a brief news conference in the opulent prime minister’s office in Putrajaya, near Kuala Lumpur, before he and Mr. Harper left Malaysia separately to attend the annual APEC summit of Pacific Rim leaders.
“This is a very significant landmark decision by Petronas,” Mr. Najib said. “It is done in the wake of the friendly relations we have and the positive response we received from the Canadian government in respect to Petronas’ involvement in Canada.... We have a very high level of confidence that this investment will be supported by the Canadian government today and in the future.
“We believe that this project will be mutually beneficial because it will open up Canadian energy to new markets, not simply in east Asia, at the same time creating jobs.” The Malaysian leader said his government would be equally welcoming of Canadian investment.
Mr. Harper did not refer directly to Mr. Najib’s remarks about the Petronas investment — or to the huge dollar figure that his Malaysian counterpart attached to it — before making the three-hour flight to Bali on an RCAF aircraft. But he said, “We view the Petronas investment very positively. All the indications are that Petronas is looking at further investments and Canada is very excited about this possibility.”
Such investments will each be judged on their own merits and whether they serve Canadian interests, he added. “Obviously our policy involves the use of discretion when it comes to state-owned enterprise,” Mr. Harper said.
It has been known for some time that Petronas would be spending big dollars in Canada, but previous estimates of the size of Petronas’ investment had usually come in at no higher than $19-billion. Mr. Najib did not explain the large difference.
But the Petronas takeover of Progress Energy — and a bigger oilpatch buyout by China’s state-owned CNOOC last year — prompted months of hand-wringing by the Harper government, which approved them while at the same time introducing new rules that permit majority takeovers of Canadian companies by state-owned enterprises only in the most exceptional circumstances.
In Ottawa Sunday, Opposition NDP leader Tom Mulcair reacted to the latest announcement by saying, “We’re always happy to see investment if it’s sustainable investment.
“One of the problems we’re facing is that Stephen Harper’s gutted all of the sustainable legislation in Canada and that means Canadians no longer have a credible, thorough environmental assessment that they can look at and say ‘OK, this can be done safely.’”
Mr. Mulcair said the announcement also shows “we still haven’t provided a clear answer as to what the rules are for foreign investment.
“The problem, the base problem, is that the Canadi an government under the Conservatives has failed to provide clear rules. That’s the No. 1 problem. It’s what we went through with Petronas and Nexon-CNOOC last year,” Mr. Mulcair said.
Meanwhile, wit h U. S . President Barack Obama not attending the APEC gathering because of the budget stalemate with Congress, Asian news media have suggested that the trans-Pacific Strategic Partnership, which is to facilitate trade well into the future, may not be signed this year as Mr. Obama had hoped.
The 12-country negotiations involve Brunei, Japan, Malaysia, Singapore, Vietnam, Australia, New Zealand, Chile, Peru, Mexico, the U.S. and Canada, which finally joined the talks last October. China and Russia are not party to the talks, which Beijing regards as an attempt to blunt its economic role in the Pacific Rim.
“The end of the year is a very tight timeline,” to conclude the TPP, Mr. Najib said. “We will have discussions in Bali and we will have a sense whether that timetable is feasible but our sense is that it may take longer than the time horizon of the end of the year.”
Mr. Harper was no more optimistic than his Malaysian counterpart about the talks, which Mr. Obama wants to lead to a deal that will be “the gold standard” for the 21st century.
“There will be a conversation about this among the heads of government who are present except for Mr. Obama and there has been progress,” Mr. Harper said. “But as Prime Minister Najib said, the negotiators have much to still do.”
The Canadian prime minister remained upbeat about Canada’s chances to snag a growing share of Asia-Pacific trade, which he made a top priority three years ago.
“It is no international secret that the rise of Asia is on the minds of all of us,” Mr. Harper said. “It will be one of the dominant realities of the coming century. It is one of the reasons we continue to put a greater emphasis on Asian relations. I think that western countries will have their place in the world provided that we make good decisions. We in the West have very prominent prosperous economies with lots of skills and in most cases systems of government that are very stable over long periods of time.”