KUALA LUMPUR, Sept 12 — China Petroleum Pipeline Engineering Co. will negotiate with Malaysia for reasonable compensation over three projects cancelled by the government here.

The firm said in a statement that it accepted Putrajaya’s reasons for terminating the three infrastructure undertakings.

"CPP will proceed to discuss with the asset owner/Malaysian government for a fair and equitable compensation for the cancellation of the projects.

"As a result of the cancellation, CPP will reassign staff, both local and foreign, previously designated to the pipeline projects to other ongoing CPP projects in Malaysia and in other parts of the world.”

Putrajaya confirmed last week that it has terminated the three gas pipeline projects, which the Finance Ministry previously revealed to have dubious payment structures and suspected links to the 1MDB corruption scandal.

The projects were among those Prime Minister Tun Dr Mahathir Mohamad had sought to convince China to cancel during his official visit to Beijing last month.

Since taking power, the Pakatan Harapan government has suspended the East Coast Rail Link, deferred the High Speed Rail with Singapore, and cancelled the three pipeline projects awarded to Chinese firms.

The government insists Malaysia’s debts and liabilities were now in excess of RM1 trillion and the country cannot afford to proceed with the large-scale projects at the moment.