B.C. and Petronas sign Letter of Intent for LNG development

As part of the Letter of Intent the B.C. Government is aiming to have some clarity to their LNG tax by the end of November this year. The solution would cover taxes, First Nations compensation, and money spent in meeting environmental regulations. There has been concern on the behalf of some companies as to the logistics of the tax which will see seven per cent of LNG income taken by the province after a company has recovered their capital costs.

In a release Premier Clark says, “Securing this commitment from Petronas shows that our strategy for attracting investment to B.C. is working. Our goal is to be the most competitive jurisdiction in the world for LNG, and build a sustainable industry that creates 100,000 jobs, and opportunities for generations to come – and we’re gaining momentum every day.”

In the same release Tan Sri Dato’ Shamsul Azhar Abbas says, “It is vital for Petronas and its partners that the integrated project, comprised of Pacific NorthWest LNG Ltd. And Progress Energy Canada Ltd. remain on track to reach our final investment decision by the end of 2014 to meet energy demands of our Asian buyers. We have been engaging with the Government of British Columbia to ensure that the projects costs remain economically viable. The signed Letter of Intent is a positive step for the project and reinforces our collaborative and productive relationship with the Government of British Columbia as we aim towards our final investment decision at the end of 2014.”

Both groups will have senior executives prepare terms of reference for a Project Development Agreement by the end of June of this year and to be negotiated by the end of November this year as well.

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