Canada approved on Tuesday a massive Can$36 billion ($27 billion USD) project by Malaysia's Petronas to build a liquefied natural gas pipeline along its Pacific Northwest coast, targeting Asian markets.

The project is the first deal by Canada's year-old Liberal government that goes against environmentalists in the name of the country's economic interests.

Environmental activists and indigenous groups have opposed the plans.

"The government approved the Pacific Northwest LNG project," said Environment Minister Catherine McKenna.

"As the prime minister has emphasized, the only way to get resources to market in the 21st century is if it is done sustainably and responsibly. Today's announcement reflects this commitment," she said.

Prime Minister Justin Trudeau has repeatedly said that the economy and environment should be pursued in parallel, without sacrificing one for the other.

The project includes a pipeline and two Petronas terminals to ship gas to Asia.

The gas terminals are to be built on Lelu Island, near Prince Rupert on the Pacific coast. Each will have a capacity of six million tons per year, with the possibility of adding a third down the road.

The pipeline built by the operator TransCanada must cross 900 kilometers of British Columbia between Hudson's Hope (about 400 kilometers or 250 miles north of Prince George), ending at Lelu Island.

The pipeline deal comes after Petronas in late 2012 snapped up Canada's Progress Energy Resources gas producer for $5.2 billion.

- Climate change, pollution worries -
Environmental groups worry the pollution created will worsen global warming.

"How can Prime Minister Trudeau claim to be a climate leader on the international stage, while approving this new project that will become the single largest source of climate pollution in the country," said Karen Mahon, national director of Stand.

"Honestly we expected better," she said. "This government cannot make decisions like this while honoring their promises on climate change."

Meanwhile, many members of Canada's First Nations -- indigenous people whose ancestors lived off the land gently for thousands of years -- are concerned about potential sullying of fishing waters.

The deal means heavy LNG traffic through a maze of islands where salmon is a vital resource.

However, others were upbeat about job opportunities.

The green light for the pipeline project comes a few weeks after a key meeting between federal and provincial governments to define the necessary steps to reduce carbon emissions under last year's Paris climate agreement.

Canada, which has pledged to ratify the agreement, wants to impose a carbon tax on the provinces, a decision that does not hit everyone equally -- especially oil-producing Saskatchewan.

Other Canadian provinces want to keep the carbon trading market principle already in force.