British Columbia Premier Christy Clark pledged the province will be the best place in the world to liquefy natural gas even as she declined to quantify her new tax on the industry.
Canada’s westernmost province will be the “most competitive” place to invest in LNG exports, offering certainty and a “low-tax environment,” Clark said at an industry conference in Vancouver today, less than three months before a provincial election.
The province introduced an LNG tax this month it expects will raise C$260 billion ($259 billion) in government revenues over 30 years and didn’t spell out the rate.
The tax will give British Columbians a slice of the industry’s profits without scaring away investment, Clark told reporters.
“We are currently at the negotiating table with the big proponents, and they know exactly what we’re talking about, but we are in negotiations, so I don’t want to imperil the outcome of those negotiations by talking about it here today.”
Royal Dutch Shell Plc (RDSA), Chevron Corp. (CVX) and BG Group (BG/) have proposed projects along Canada’s Pacific Coast to liquefy natural gas produced from shale formations for shipment by tanker to Asian markets, where buyers will pay five times the North American price. Executives are seeking clarity on the new tax, according to Petroliam Nasional Bhd, which deems it unfair.
The tax is “added uncertainty” for LNG developers, Michael Culbert, president of the Malaysian state energy company’s Canadian unit, said in an interview today. “It’s one single export being selected and a tax put on it. There isn’t on coal, there isn’t on lumber that’s exported, so why LNG.”
Fewer than the handful of LNG terminals proposed in Canada may be built to supply 3 billion cubic feet of gas a day this decade, according to Calgary consultant Ziff Energy Group, which forecasts global demand growth of 20 bcf/d by 2025. Petronas is still studying the feasibility of a terminal near Prince Rupert, British Columbia, Culbert said, which would export as much as 18 million metric tons of LNG a year.
Drilling for gas in shale formations across North America caused prices for the heating- and power-plant fuel to fall starting in 2008. Gas has rebounded from a decade low in April. Gas in Asia is linked to oil and typically fetches more.
NDP leader Adrian Dix’s party has 47 percent voter support, ahead of the 31 percent for the ruling Liberals, according to an Angus Reid Public Opinion online poll of 803 people surveyed between Feb. 21 and Feb. 22 and published today.
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