(Adds details regarding project, background)
By David Ljunggren, Julie Gordon and Emily Chow
OTTAWA/VANCOUVER/KUALA LUMPUR, March 19 (Reuters) - A major
liquefied natural gas export project in Canada ran into another
delay on Saturday when the federal environmental assessment
agency was granted an extra three months to finish an impact
study.
Ottawa did though commit to announcing a final decision on
the project this year, which would end a long-running saga for
Malaysia's state-owned oil giant Petronas PETR.UL .
The firm and its partners have been waiting nearly three
years for a permit to build the Pacific NorthWest LNG facility
in northern British Columbia, on the Pacific coast.
News of the latest delay broke on Saturday, when federal
Environment Minister Catherine McKenna agreed to the Canadian
Environmental Assessment Agency's request (CEAA) for the extra
three months.
The CEAA - which had been due to deliver its report to
McKenna by March 22 - said it needed more data from the
project's backers after they handed over a series of documents
and observations on March 4.
A spokeswoman for McKenna said the federal cabinet would
announce a decision three months after the backers had handed
over the requested additional information.
The ambitious plan to build Canada's first LNG export
terminal faced challenges from the start, including controversy
over its chosen site, which local aboriginal and environment
groups said would destroy a critical salmon habitat.
It is also the first major project to have an environmental
assessment completed under new rules that include the impact of
upstream production on project emissions.
A spokesman for Pacific NorthWest did not immediately
respond to a request for comment.
Petronas, battling a profit-sapping slump in prices that
could produce heavy losses, can ill afford to splurge on future
supply.
But neither can it afford a lengthy and inconclusive process
with authorities in Canada, where the project is seen as a test
of Prime Minister Justin Trudeau's green credentials.
Trudeau's Liberals came to power last November promising to
do a much better job of protecting the environment than the
previous Conservative government.
But the Liberals, who say Canada must cut emissions of
greenhouse gases, are also under pressure to push through
approvals of projects in the energy sector, which is losing jobs
due to the slump in oil and gas prices.
"The agency has requested additional information from the
proponent in order to determine whether the project is likely to
cause significant adverse environmental effects," it said in the
statement.
The request for more time to complete the impact study
raises the prospect of more conditions on construction. This
could simply make the project economically enviable, analysts
say, leaving Petronas to write off billions already invested.
For Petronas, and Malaysia, the conditions have changed
dramatically since it launched the project, long considered a
front-runner among dozens proposed for British Columbia.
Gas prices are currently a quarter of 2014's peak. Last
month, Petronas cut jobs and announced some $12 billion in
spending cuts over the next four years - the same sum analysts
estimate it has sunk into the Canadian project.
And Malaysia's economy too is cooling, dampened by China and
a domestic financial scandal. Petronas is one of the country's
biggest employers and accounts for nearly a third of the
government's oil and gas-related revenue.
The stakes are also high for Canada, which is seeking to
kick start the local LNG industry, said Wood Mackenzie analyst
Chong Zhi Xin, speaking before Saturday's announcement.
But those ambitions come as Trudeau promises to transform
Canada's environmental image. If built, environmental
campaigners say the Petronas project would tarnish that.
($1=$1.30 Canadian)
(Editing by Nick Zieminski and Bernard Orr)