British Columbia Introduces Tax on LNG Projects to Pay Down DebtRebecca Penty
British Columbia, assuming five liquefied natural gas terminals will be built in the province by 2020, introduced a tax on the industry that is less than Australia’s levy, the government said today.
Canada’s westernmost province forecast it will raise as much as C$260 billion ($259 billion) over the next three decades to cut debt and funnel revenues into a so-called Prosperity Fund, according to statements from the government after Premier Christy Clark outlined her LNG plan in a speech.
A study by the government found the new tax will keep the province “competitive” globally. “This review has concluded that B.C.’s main competitor is Australia, which has an LNG tax and royalty regime that is up to one-third higher than B.C.’s,” according to a statement from the Ministry of Finance.
British Columbia is home to the Montney Shale, with an estimated 49 trillion cubic feet of gas reserves. Royal Dutch Shell Plc, Chevron Corp. and Petroliam Nasional Bhd have developed potential projects to liquefy the gas and ship it by tanker to Asian markets, where the fuel sells for about five times North American prices.