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B.C. announces rebates for LNG projects in big boost to Shell’s $40B project

A model at the LNG Canada offices in Kitimat, B.C., shows the proposed liquified natural gas liquification plant and marine terminal. ROBIN ROWLAND/THE CANADIAN PRESS FILES 

March 22, 2018 | Last Updated: March 22, 2018 1:46 PM MDT

VICTORIA — British Columbia is offering new conditions and rebates for liquefied natural gas projects in the province.

Premier John Horgan made the announcement Thursday ahead of a final investment decision on LNG Canada’s $40-billion project, which would include a natural gas pipeline built from northeast B.C. to a new terminal in Kitimat.

“Potential opportunity is extraordinary. Potential risks are significant,” Horgan said. “I believe LNG Canada is working diligently to address those risks and I believe it’s the responsibility of the government to make sure we’re working to develop those opportunities for all British Columbians.”

Under the new fiscal agreement, LNG projects will see relief from provincial sales taxes, subject to repayment in the form of an equivalent operational payment.

They will be subject to new greenhouse gas emission standards and general industrial electricity rates consistent with other industrial users in B.C.

Horgan said the province will review LNG projects using four conditions. All LNG projects should guarantee a fair return for B.C.’s natural resources, guarantee jobs and training opportunities for British Columbians, respect and partner with First Nations, and meet the province’s climate commitments, he said.

In January, Green party Leader Andrew Weaver threatened to bring down the minority NDP government if it continued to pursue what he described as the “LNG folly,” saying the province couldn’t meet its greenhouse gas emission targets if it pursues the LNG industry.

In the past year, companies have pulled the plug on three LNG projects proposed in B.C., including the $36-billion Pacific Northwest LNG pipeline project.

LNG Canada, which includes partners Shell, PetroChina, Korea Gas and Mitsubishi, said in 2016 that its final investment decision for the Kitimat facility would be delayed because of poor global markets.

Those markets are turning around, says Shell’s 2018 LNG outlook. It found the market has defied expectations, growing by 29 million tonnes in 2017.

“Based on current demand projections, Shell sees potential for a supply shortage developing in the mid-2020s, unless new LNG production project commitments are made soon.

LNG development was a centrepiece of the B.C. Liberal party’s 2017 election campaign.

— By Amy Smart in Vancouver.

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