B.C. Halves Tax Rate to Salvage Malaysian LNG Megaproject
British Columbia has halved the tax rate it will charge on liquefied natural gas (LNG) megaprojects after the Malaysian state oil company, Petronas, threatened to abandon its project in northern B.C. late last month.
In February, the province proposed a tax rate of 1.5 to 7% on net income once LNG producers recovered capital costs. Earlier this week, B.C. announced a rate of 1.5 to 3%. The Observer captures a range of views on whether the lower rate was needed to capture the business, with energy journalist Andrew Nikiforuk noting that B.C. already had one of the world’s lowest tax regimes for natural gas.
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“To date, none of the proponents of 18 LNG shipping terminals in British Columbia has agreed to start construction,” Uechi notes, even though Premier Christy Clark made the LNG boom the centrepiece of her re-election platform last year.