There's still a need to get Canadian natural gas out of North America, energy company TransCanada said after an export option for British Columbia was scrapped.

Malaysia energy company Petronas said that, as the head of a partnership, it was no longer pursuing a liquefied natural gas project at Port Edward in British Columbia. Anuar Taib, the company's CEO, said the decision was made because of an "extremely challenging environment" brought on by a weak market.

Pipeline and energy company TransCanada, which was involved with a Petronas affiliate on the project, said it was disappointed with the decision, but would be reimbursed for costs associated with the development.

"There is still a strong need for Canadian natural gas supplies to get to market," Karl Johannson, the company's regional leader for gas infrastructure, said in a statement.

The project would've cost about $28 billion and included a 560-mile pipeline from TransCanada, which said there are other potential LNG projects that it would continue to explore for British Columbia.

Canada relies on the United States as its top export destination for key commodities like oil and soft lumber, but has reached out to Asian economies in an effort to diversify its economy. In early January, the government signed off on plans from pipeline company Kinder Morgan to triple the capacity of its Trans Mountain pipeline to the western coast to around 890,000 barrels of oil per day.

The decision followed the appointment of John Horgan as the new premier for British Columbia. In a mandate to his ministers, Horgan called for stronger coordination with Green Party advocates who helped bring him to defeat Christy Clark, a pro-energy leader. In a letter to Michelle Mungall, the provincial energy minister, Hogan said residents should benefit from LNG so long as the programs include climate safeguards and provide a fair return on investment.

Mungall was quoted by Bloomberg News as saying the decision from Petronas was strictly "about global market pricing."

The nation's economy, which relies in part on exports of fossil fuels, was hit hard by the downturn in crude oil prices last year. Canadian Prime Minister Justin Trudeau said in a mid-year progress report, issued in June, that the best economic days lie ahead for Canada.

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