Urges investment in domestic renewables

Background

LNG Canada is an industrial joint venture project located in Kitimat, British Columbia. It comprises an LNG export facility, facilitating the trade of fossil gas produced onshore in Northeastern British Columbia transported through the Coastal Gaslink (CGL) Pipeline to Kitimat. Phase one of the project covered the construction of the Pipeline and various export-related infrastructure.

On 30th September 2026, it was announced that PETRONAS and its partners Shell, PetroChina, Mitsubishi Corporation and KOGAS, had made the financial investment decision on the Phase 2 expansion of the LNG Canada facility, which, they claim, will make it the second largest LNG facility in the world. The investment decision, which amounts to RM94.7bil, of which RM23.68bil is PETRONAS’s equity, based on their share of 25%, aims to double the annual production capacity of the facility from 14 million tonnes per annum (mtpa) to 28 mtpa [1]. This will be achieved through the expansion of the CGL pipeline, processing systems, storage tanks and loading berths.

Responding to this development, the undersigned organisations remind PETRONAS of the poor human rights record of LNG Canada, the contribution of the facility in particular, and fossil gas in general, towards greenhouse gas emissions and questions why billions of ringgit are being invested in fossil fuel infrastructure abroad rather than building renewable capacity domestically.

LNG Canada’s poor human rights record

LNG Canada relies on the Coastal Gaslink (CGL) pipeline for its gas supply, and under Phase 2 the joint venture is now directly involved in the expansion of the pipeline. The CGL pipeline has been one of the most controversial projects in Canada’s industrial history due to its violations of the rights of First Nations communities. In a 2025 letter [2] written by a delegation of the Wet’suwet’en Nation to PETRONAS, the delegation affirmed that the CGL pipeline crosses the traditional territory of the Nation without the Free, Prior, and Informed Consent (FPIC) of the hereditary chiefs who hold legal title to these lands under Canadian constitutional law, a 2020 Memorandum of Understanding between the federal and provincial governments and the UN Declaration on the Rights of Indigenous Peoples.

The letter outlined that Wet’suwet’en hereditary chiefs consistently and lawfully opposed the CGL pipeline. Despite this, the letter documents that the pipeline has already violated British Columbia’s environmental regulations more than 60 times, including causing the sedimentation of rivers and damage to fish habitat and sacred sites. Additionally, the letter details how the Royal Canadian Mounted Police (RCMP) carried out a campaign of harassment and intimidation against Wet’suwet’en people during the CGL Pipeline’s construction – an action which the British Columbia Supreme Court later affirmed as ‘offensive, racist, dehumanising and a breach of human rights’ [3].

Amnesty International and the United Nations Committee on the Elimination of Racial Discrimination (CERD) [4] have all issued urgent warnings to the developers of the CGL Pipeline. In January 2023, seven United Nations Special Rappertours issued an official letter to PETRONAS (ref:AL OTH 119/2022) [5], under the Mandates of the Working Group on the Issue of Human Rights and Transnational Corporations and other Business Enterprises, detailing their concerns regarding PETRONAS’s involvement in human rights abuses associated with the LNG Canada project. Disturbingly, PETRONAS did not respond to this United Nations letter, nor did they respond, meet or engage in any capacity with the Wet’suwet’en delegation that visited the PETRONAS Kuala Lumpur headquarters physically in December 2025.

Repeated environmental failures

Fossil gas is a fossil fuel composed primarily of methane. Fossil fuels, including fossil gas, are the primary driver of anthropogenic climate change, and methane is a potent greenhouse gas with 25 times the global warming potential of carbon dioxide over a 100-year lifespan. The Intergovernmental Panel on Climate Change (IPCC), in its sixth assessment report, concluded that all expansion of fossil fuels beyond existing capacity is inconsistent with a 1.5 degree pathway, meaning that the expansion of LNG Canada is directly in contradiction with climate scientific consensus.

LNG Canada originally referred to its facility as the “world’s cleanest” LNG project, planning to operate without routine flaring. However, Phase 1 ultimately flared 350 million cubic metres of gas in its first year of operation. Consistently flaring at rates higher than those allowed by provincial government regulations, LNG Canada was estimated to be the single largest source of global flaring emissions in 2024 [6], and these flaring events are ongoing as of 2026 [7].

Importantly, while the facility is equipped with acid gas incinerators which are supposed to eliminate dangerous gases such as hydrogen sulphide and benzene, over an eight month period these incinerators were offline for 139 days. These gases were flared, therefore leading to higher levels of volatile organic compounds emitted into the surrounding airshed, with benzene being a potent carcinogen [8].

Beyond the 60 environmental violations associated with the initial construction and operation of the CGL pipeline, LNG Canada has received a regulatory order for violating its permit conditions through blacksmoke flaring events [9] and was fined in October 2026 for failing to adhere to its marine mammal management and monitoring plan [10]. This is particularly concerning as a WWF-Canada-supported [11] modelling study found that LNG-related shipping in the fjord area associated with LNG Canada is expected to lead to the deaths of two fin whales and 18 humpback whales per annum.

Contribution to Malaysia’s energy insecurity

It must be noted that the LNG Canada facility will bring little benefit to Malaysia’s energy transition and security. Firstly, the facility is not currently intended to export LNG to Malaysia for our own domestic consumption. Secondly, even if it were to in the future, Bloomberg NEF [12] identified that the levelised cost of electricity (LCOE) for solar with battery storage is already lower than gas in Malaysia, at USD79 per MWh compared to USD82 for gas. By 2030, the LCOE for solar with storage is expected to be 34% cheaper than gas. Further, a WEF report [13] found that relying on imported LNG is 30% higher than using domestic gas for power generation. With domestic resources depleting, and highlighting the vulnerability of LNG to price shocks and supply disruptions, the report warns Malaysia to reduce long-term gas lock-in and diversify its energy sources away from the commodity.

It is therefore questionable that PETRONAS has chosen to invest RM23.68bil (its estimated equity share) in LNG Canada Phase 2, a decision which prolongs an increasingly archaic energy source, exacerbates global greenhouse gas emissions and does not directly benefit Malaysia’s energy systems. Instead, at estimated construction costs of RM3.5mn [14] per MW, PETRONAS’s equity share in LNG Canada Phase 2 could have developed 6.8GW of installed solar capacity in Malaysia, more than doubling its installed capacity as at end-2025 [15].

Conclusions

The RM23.68bil investment in an LNG facility is a fiscal gamble given the unclear future potential of LNG, which PETRONAS itself has acknowledged is facing reduced long-term demand due to its extreme price volatility and unaffordability [16], and which previous projections have shown will contract after 2030 [17]. It is deeply concerning that PETRONAS, which claims to play a ‘key-role in the energy transition’, and which‘focuses on energy security’ [18] , is risking billions of ringgit on an LNG gamble with no benefit to Malaysia’s energy security rather than securely investing that in providing safe, clean, reliable and affordable energy to the Malaysian populace, the very constituency that PETRONAS was purportedly established to serve.

The undersigned organisations demand that PETRONAS abandons these bets on unclear long-term fossil fuel demand, adopts a responsible and proactive role in the energy transition, and repurposes its LNG Canada investment to growing renewable energy capacity within Malaysia.

Notes to Editor
This press release is published by the Artivist Network, RimbaWatch and Greenpeace Malaysia in collaboration with the Skeena Watershed Conservation Coalition, an NGO based in British Columbia, Canada.

Sources:
[1]The Star. “Petronas partners finalise RM947bil LNG Canada Phase 2 Investment”. The Star, 30 September 2026.
https://www.thestar.com.my/news/nation/2026/09/30/petronas-partners-finalise-rm947bil-lng-canada-phase-2-investment
[2]Chief Na’moks and Gwii Lok’im Gibuu. “Complaint Regarding PETRONAS’s Human Rights Failures and Ongoing Involvement in the LNG Canada and Coastal GasLink Projects”. 1 December 2025.
https://docs.google.com/document/d/1yeZ0Roajx67KeCdruhvCklXTRqdsclQuQZpwLk5gKAo/edit?usp=drivesdk
[3]Amnesty International. “Canada: Court Acknowledges Police Abuses but Upholds Wet’suwet’en Land Defenders’ Convictions.” Amnesty International, 19 Feb. 2025, https://www.amnesty.org/en/latest/news/2025/02/ai-respond-indigenous-land-defenders-trial
[4]UN Committee on the Elimination of Racial Discrimination (CERD). Decision 1(100), Dec. 2019; and Decision 1(102), Nov. 2020. https://tbinternet.ohchr.org
[5]Mandates of the Working Group on the issue of human rights and transnational corporations and other business enterprises. 13 January 2023, https://spcommreports.ohchr.org/TMResultsBase/DownLoadPublicCommunicationFile?gId=27693
[6]Matt Simmons and Will Crisp. “Malfunctioning Canadian LNG terminal burned more gas than estimated 2024 global record”. The Narwhal, April 16 2026.
https://thenarwhal.ca/lng-canada-burned-gas/
[7]David Suzuki. “New evidence exposes LNG Canada’s invisible air pollution”. June 24 2026. https://davidsuzuki.org/press/new-evidence-exposes-lng-canadas-invisible-air-pollution/
[8]The Tyee. “LNG Canada’s Acid Gas Incinerators Keep Failing”. 20 July 2026. https://thetyee.ca/News/2026/07/20/LNG-Canada-Acid-Gas-Incinerator-Keeps-Failing/
[9]The Energy Mix. “Black smoke and broken equipment fuel health concerns at LNG Canada’s Kitimat facility”. 4 May 2026. https://www.theenergymix.com/black-smoke-broken-equipment-fuel-health-concerns-at-lng-canadas-kitimat-facility/
[10]CBC. “LNG Canada fined 50k over underwater noise monitoring”. 7 October 2026.
https://www.cbc.ca/news/canada/british-columbia/lng-canada-fine-underwater-noise-monitoring-9.737193
[11]WWF Canada. “FATAL SHIP-STRIKE RISK FROM LNG TANKERS THREATENS GREAT WHALES IN BC’S GREAT BEAR SEA”. 29 July 2025. https://wwf.ca/stories/fin-whale-fatal-ship-strike-risk-lng-tankers/
[12]Bloomberg NEF. “Malaysia: A Techno-Economic Analysis of Power Generation”. 9 April 2025.
https://about.bnef.com/insights/clean-energy/solar-and-batteries-can-meet-malaysias-growing-electricity-demand-without-compromising-energy-security-and-affordability/
[13]World Economic Forum and PETRA. “Beyond Coal: Building a Flexible, Resilient and Clean Power System for Malaysia”. July 2026, https://reports.weforum.org/docs/WEF_Beyond_Coal_Clean_Power_Malaysia.pdf
[14]Tnglobal. “ESCALATING PROJECT COST MAY DELAY LARGE SCALE SOLAR PROJECTS IN MALAYSIA – UOBKAYHIAN”. 23 January 2026.
https://technode.global/2026/01/23/escalating-project-cost-may-delay-large-scale-solar-projects-in-malaysia-uobkayhian/
[15]PV Magazine. “Malaysia’s solar capacity surpasses 5.7 GW”. 3 April 2026.
https://www.pv-magazine.com/2026/04/03/malaysias-solar-capacity-surpasses-5-7-gw/
[16]The Star. “PETRONAS CEO warns of LNG Bloodbath as Prices Surge”. 7 October 2026. https://www.thestar.com.my/business/business-news/2026/10/07/petronas-ceo-warns-of-lng-bloodbath-risks-as-prices-surge#goog_rewarded
[17]Energy Tracker Asia. “The IEA’s World Energy Outlook 2023: Global and Asian Gas Demand to Peak by 2030”. 22 November 2023.
https://energytracker.asia/world-energy-outlook-2023-asian-gas-demand/
[18]PETRONAS. “PETRONAS ENERGY TRANSITION STRATEGY”. 2022, https://www.petronas.com/integrated-report-2022/assets/pdf/PIR2022-PETRONAS-Energy-Transition-Strategy.pdf