Canada delays decision on Petronas LNG project for further study

OTTAWA, 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.

The Malaysian state-owned oil giant Petronas and its partners have been waiting nearly three years for a permit to build the C$36 billion ($28 billion) LNG facility in northern British Columbia, on the Pacific coast.

Environment Minister Catherine McKenna agreed to the Canadian Environmental Assessment Agency's request (CEAA) for the extra three months, an agency statement said.

Once the agency has filed its final report, the federal cabinet will decide whether to approve the project. There is no time limit for cabinet to make that decision.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.

The decision is a tricky one for the new Liberal government of Prime Minister Justin Trudeau, which came to power last November promising to do a much better job of protecting the environment than the previous Conservative administration of Stephen Harper.

The Liberals, who say Canada must cut emissions of greenhouse gases, are under pressure to push through approvals of projects in the energy sector, which is losing jobs amid a slump in the price of oil and other commodities.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.

"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 CEAA released a draft review last month that found the project would likely have "significant adverse environmental effects" on harbor porpoises and in terms of greenhouse gas emissions.

The agency received more than 34,000 comments from the public and Aboriginal groups, along with a swath of additional information from the company, which were included in the final report presented to McKenna.  REUTERS