BC proposes incentives for Shell-led LNG export terminal at Kitimat

BC proposes incentives for Shell-led LNG export terminal at Kitimat

British Columbia authorities are proposing new incentives seen as encouraging progress with a proposed liquefied natural gas (LNG) export terminal near Kitimat in northern BC.

The LNG Canada project has been in limbo since consortium leader Shell postponed a final investment decision (FID) in 2016 so it could look for cost reductions in response to low prices.

BC’s incentives include removal of an LNG income tax, exemption from a provincial sales tax during project construction, tailored application of climate-mitigation regulations and modified requirements regarding electricity rates.

But the Green Party, a member of BC’s governing coalition, needs to evaluate the potential impact on climate targets before agreeing.

Shell is the lead party on the LNG Canada project in partnership with PetroChina, KOGAS and Mitsubishi Corporation.

In BC’s calculations the LNG Canada plant would be the world’s cleanest LNG facility in terms of low greenhouse gas emissions and is estimated to produce $22 billion in government revenue over 40 years as well as employing 10,000 people by 2021.

Three other LNG export facility projects have been cancelled in BC including a potential $28bn facility at Lelu Island in the north of the province. That was called off by majority stakeholder Petronas in July 2017.

Petronas, Malaysia’s state oil firm, cited poor market conditions for that decision.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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