TORONTO — Progress Energy Ltd., a unit of Malaysia’s state-owned Petronas Bhd., is drastically slashing its capital expenditure as it awaits a final approval from the Canadian environmental agency on a proposed liquefied natural gas export project on the West Coast.

“The plan with the final investment decision (FID) moving forward was another $5 billion in the next three years moving into the development phase,” said Michael Culbert, president and chief executive officer of Progress, noting the company has already sunk $5 billion in the past three years to prove up reserves in the Montney basin that straddles the Alberta-B.C. border .

“We are going to drop that (figure) down to somewhere around $500 million over the next two years – so a significant drop.”

The cuts are part of Petronas’ US$11.4 billion reduction in capex across its portfolio over the next four years.