Petronas clarifies Canadian subsidiary’s gas production restriction

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has clarified that Petronas Energy Canada used summer months as an opportunity to perform maintenance, inspection of production facilities.

Responding to reports that it had curtailed LNG Canada production due to low prices, Petronas said: “We would like to clarify that the news in question was in reference to intermittent market conditions over the summer months in Canada, which its subsidiary Petronas Canada had used as an opportunity to perform maintenance and inspection of its production facilities,” it said in a statement today.

“These maintenance and inspection activities are usually performed in the normal course of business by companies under similar circumstances,” it added.

The national oil company also noted that Petronas Canada and its partners were currently producing at near full capacity at 620 mmscfd from its Canadian ventures in the North Montney, northeast British Columbia (BC).

It was reported that Petronas haf been curtailing production by between 50 and 200 million cubic feet per day (cf/d) from wells in northeastern BC capable of producing 700 million cf/d, due to low prices of liquified natural gas (LNG).

According to The Canadian Press report, natural gas prices in Western Canada were so low that Petronas, a partner in the country’s first LNG export project, is shutting off money-losing wells and throttling back its exploration program.

The report said the practice was one being adopted by a growing number of western Canadian producers to avoid selling their natural gas at prices that often don’t even cover the cost of pipeline transportation.

Petronas owns a 25 per cent stake in the C$40 billion (RM123.27 billion) LNG Canada project.

Source: NST