The British Columbia (BC) government delivered Monday on a promise of up to C$6 billion ($4.5 billion) in aid for the first liquefied natural gas (LNG) export project to enter construction on the province’s northern Pacific coast.
The New Democratic Party (NDP) regime introduced legislation enabling favorable corporate income and sales tax cuts for the LNG Canada development at Kitimat sponsored by a consortium led by a unit of Royal Dutch Shell plc (40%), with Asian partners Petronas (25%), Mitsubishi Corp. (15%), PetroChina Co. (15%) and Korea Gas Corp. (5%). The project was sanctioned last fall.
“These steps will deliver the fiscal setting needed for LNG Canada’s proposed C$40-billion project ($30-billion) in northern British Columbia -- the largest private-sector investment in BC’s history,” said the government. “It is expected to create 10,000 construction jobs and up to 950 permanent jobs in the Kitimat processing terminal.”
The new LNG export terminal, gas supply pipeline and associated gas drilling will also eventually spin off C$23 billion ($17 billion) in government revenues, predicted the BC NDP regime.
Shell Canada Energy Ltd. said the LNG export project would be online and shipping to Tokyo Bay by the mid 2020s. Initially, the project is to consist of two liquefaction trains that together would provide 14 million metric tons/year of LNG. There also is an option to expand to four trains in the future.
While the bill still has to be debated, only the three BC Green Party members of the 87-seat provincial legislature are opposed. The 42 Liberals in the official opposition, as keen supporters of LNG development before they lost a 2017 election, back the NDP aid package.
The Greens last year dropped a threat to scrap their coalition agreement to keep BC’s 41-member NDP government in power if LNG Canada moved forward but they said their environmental scruples still rule out financial support for fossil fuel projects.
An NDP government statement predicted the assistance package would pay off in big, lasting economic gains from LNG Canada on top of a new industrial customer for “clean” power from provincially owned BC Hydro.