Malaysia's state-owned oil corporation Petronas may pull the plug on its $10-billion proposed liquefied natural gas project in Prince Rupert.

Shamsul Abbas, the company's CEO, told the Financial Times of London last week that the future of the project remains uncertain due to international competition from advanced U.S. LNG projects, as well as B.C.'s modest proposed tax on LNG profits.

"Rather than ensuring the development of the LNG industry through appropriate incentives and assurance of legal and fiscal stability, the Canadian landscape of LNG development is now one of uncertainty, delay and short vision," Abbas told the Times.

He also accused the B.C. government, which has granted significant subsidies to the shale gas industry in terms of low royalties, infrastructure incentives, free water and free geoscience, of offering "a lack of appropriate incentives."

But Rich Coleman, B.C.'s minister of Natural Gas Development, told the CBC that he's not worried because there's "good progress being made at the table."

Petronas holds a 62 per cent share in the proposed Pacific Northwest LNG terminal. The project, which would also require a $5-billion pipeline, would industrialize Lelu Island near Prince Rupert. Ship activity could threaten salmon runs from the Skeena River.

The terminal would cool and liquify shale gas piped from northeastern B.C. Another Petronas-owned company, Progress Energy, would drill and frack shale gas formations in Alberta and B.C.

The B.C. government, which now collects barely $300 million a year in royalties from the shale gas industry, recently proposed a 1.5 per cent tax on LNG profits to be followed by a tax as high as seven per cent once projects have paid off their capital investments.

The ill-defined tax, which has been repeatedly criticized by the industry and their lobbyists, would provide the owners of the resource, British Columbians, with less revenue than that now earned by Louisiana, Texas, Alaska, Australia, and Oregon, according to an Ernst and Young study.

Due to their escalating costs, technical complexity and market volatility, LNG projects are experiencing challenges around the world. Big corporations have cancelled several major projects in Australia, for instance.

More than 14 LNG projects have been proposed for the province, but not one has made a final investment decision.

Last July, U.S.-based Apache pulled out of the Kitimat LNG project due to pressure from investors concerned about the company's bottom line.

A 2014 publication by the KPMG Global Energy Centre reported that "out of the last 12 LNG projects, 10 went over time and or budget -- many by 40 to 50 per cent."

In addition, the Oxford Energy Institute reported that liquefaction unit costs for LNG (the gas must be chilled to be transported) have tripled or even quadrupled since 2000.

Award-winning journalist Andrew Nikiforuk writes about energy for The Tyee and others. Find his Tyee articles here.