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-   -   Proposed West Coast BC LNG Terminals (https://skyscraperpage.com/forum//showthread.php?t=201424)

Denscity Oct 21, 2014 5:39 PM

This issue has been in the news both yesterday and today. Some info coming shortly regarding BC's tax structure??

craneSpotter Oct 22, 2014 12:05 AM

^ yes the announcement was made today in Victoria.

Chevron to Petronas Canada LNG Proposals Get B.C. Tax Cut

http://www.bloomberg.com/news/2014-1...-s-lowest.html

Quote:

British Columbia is slashing by half a proposed levy on multibillion-dollar liquefied natural gas projects from Chevron Corp. (CVX) to Malaysia’s Petroliam Nasional Bhd. amid an energy price rout.

Canada’s westernmost province will charge a tax rate starting at 1.5 percent of profits and rising to 3.5 percent after developers recover the cost of building the terminals, Michael de Jong, the provincial finance minister, said today in Victoria. That compares with 1.5 percent and 7 percent proposed in draft legislation in February. In 2037, the top rate rises to 5 percent.

“The market is not as lucrative as it once was,” de Jong told reporters before addressing legislators in the provincial capital. “Demand in places like China and Japan is changing, evolving.”

Developers led by Chevron, Royal Dutch Shell Plc (RDSA), BG Group Plc (BG/) and Petronas, as the Malaysian state-owned crude producer is known, have pushed for better terms to invest in Canada’s Pacific Coast as they compete with other Asia-focused LNG projects in the U.S., Mozambique and Australia. None of the proponents of 18 LNG shipping terminals in British Columbia has decided to start construction.

The tax framework “provides balance and consideration of the challenges faced by an LNG sector in B.C.,” LNG Canada, a project led by Shell, said in a statement. “We are pleased to have certainty on a final B.C. LNG tax framework.”

Pacific NorthWest LNG, the C$10 billion ($8.9 billion) terminal proposal led by Petronas, is reserving comment on the tax until it has time to review it, Spencer Sproule, a spokesman for the project, said in an e-mail.

craneSpotter Oct 22, 2014 12:56 AM

This is promising ...

B.C.'s new LNG tax regime pleases one company, offers certainty to industry

By ROB SHAW and GORDON HOEKSTRA, Vancouver Sun October 21, 2014

http://www.vancouversun.com/news/met...805/story.html

Quote:

VICTORIA - At least one company behind a proposed liquefied natural gas project in B.C. says it's generally pleased with the government's new LNG tax regime.

LNG Canada, which is a Kitimat-based LNG project led by Shell, issued a statement that appeared supportive of the government tax structure unveiled Tuesday.

"We are of the view that the BC LNG tax framework announced by the government provides balance and consideration of the challenges faced by an LNG sector in B.C.,” the company said in a statement.

"We are pleased to have certainty on a final BC LNG tax framework and consider it an important input to our decision making process."

The company said it is satisfied the B.C. government recognizes the global challenges facing the LNG marketplace.

"There is much more work to do prior to a final investment decision for LNG Canada and we will continue working with First Nations and local communities, as well as municipal, provincial and federal governments," said the company.

"In particular, we look forward to continue to work with B.C. around areas of focus such as skills training and labour availability, protecting the environment, community needs and overall fiscal competitiveness and certainty," the company said.

Stingray2004 Oct 22, 2014 1:44 AM

Some Tweets from Keith Baldrey (Global BC) and Sean Leslie (CKNW):

Quote:

Keith Baldrey @keithbaldrey · 4 hours ago

Govt. documents suggest a mid-size LNG facility could generate $800 m. a yr in taxes/royalties. Based on current prices. #bcpoli
---------------------------------------------------

Sean Leslie @seanleslie980 · 5 hours ago

So if 5 #LNG plants go ahead, could=$40b in all-in revenues to BC over 10 yrs. Big if, though. #bcpoli
---------------------------------------------------

Keith Baldrey @keithbaldrey · 5 hours ago

New corporate tax credit could see some Alberta energy companies move HQs to BC. #bcpoli
Interesting stuff.

Denscity Oct 22, 2014 5:22 AM

Ya corporate tax rate lower than Alberta's to lure headquarters to BC. Here's hoping for a few new office towers (including Petronas) for Downtown Vancouver!!

lubicon Oct 22, 2014 6:02 PM

Quote:

Originally Posted by Denscity (Post 6777971)
Ya corporate tax rate lower than Alberta's to lure headquarters to BC. Here's hoping for a few new office towers (including Petronas) for Downtown Vancouver!!

I doubt that will happen. Their defacto HQ is in Calgary now and I don't see that changing.

Denscity Oct 22, 2014 7:21 PM

Quote:

Originally Posted by lubicon (Post 6778556)
I doubt that will happen. Their defacto HQ is in Calgary now and I don't see that changing.

Ya it was half serious/half wish. But with a 3% lower corporate tax rate you never know.

MalcolmTucker Oct 22, 2014 8:51 PM

Yeah, there are big economies of having everything in the same place. Even with entirely new (to Alberta) companies that have tried to set up in Edmonton at first they end up moving to Calgary. Not being able to easily have engineering, constructors, customer, environmental planners, etc makes things harder.

Making an entirely new cluster is hard. Most of these companies, unless they are headquartered in a tax jurisdiction with lower taxes than Canada, Canadian taxes are incidental. They write off 100% of Canadian tax on their USA/France/whereever taxes.

craneSpotter Oct 28, 2014 6:39 PM

TransCanada’s $4b pipeline gets B.C. environmental assessment certificate

BIV October 27, 2014 - http://www.biv.com/article/2014/10/t...ronmental-ass/

Quote:

TransCanada Corporation says that the British Columbia Environmental Assessment Office has issued an environmental assessment certificate for the $4-billion Coastal GasLink pipeline project....

...The proposed project involves the construction and operation of an approximately 670-kilometre, 48-inch diameter natural gas pipeline from the Groundbirch area near Dawson Creek, B.C., to the proposed LNG Canada liquefied natural gas export facility near Kitimat, B.C....

...The next steps for the proposed project include detailed engineering and construction planning, as well as ongoing consultation with Aboriginal groups and the public. Pending the receipt of all required regulatory approvals and a positive final investment decision from LNG Canada, the start of pipeline construction is anticipated in 2016, with an in-service date by the end of the decade.

craneSpotter Oct 28, 2014 6:41 PM

$400 million plant expansion could shift B.C.’s domestic LNG transportation market into high gear

BIV October 28, 2014 - http://www.biv.com/article/2014/10/4...ft-bcs-domest/

Quote:

Among the concerns being raised over new provincial regulations for liquefied natural gas development is that other sectors in B.C. might have to shoulder more of the burden for reducing greenhouse gases so the province can have an LNG industry and still meet its GHG reduction targets.

Perhaps ironically, a growing domestic LNG market might help achieve some of those reductions, as remote communities and the trucking and shipping industries make the switch from diesel to cheaper, cleaner-burning natural gas.

FortisBC and AltaGas Ltd. (TSX:ALA) are planning hundreds of millions of dollars worth of investments in LNG plants over the next couple of years to serve a growing domestic market for LNG.

Last week, FortisBC turned sod on a $400 million expansion of its existing LNG plant on Tilbury Island in Delta. The expansion – slated for completion in late 2016 – is being driven by a growing domestic demand for LNG by the trucking and marine industries.

craneSpotter Oct 29, 2014 5:45 PM

I think BG will probably wait to see if Petronas is going ahead...

BG Group pressing pause button on Prince Rupert LNG, citing market conditions

Vancouver Sun, Oct 29, 2014
http://www.vancouversun.com/business..._lsa=ce60-ff9d

Quote:

CALGARY - The chairman of British energy firm BG Group says it's hitting the pause button on its proposed liquefied natural gas project near Prince Rupert.

On a conference call to discuss BG's third-quarter results, interim executive chairman Andrew Gould says the company isn't abandoning the project.

But he says there's a risk the market will be well supplied past 2020, so BG is waiting to see how conditions evolve.

craneSpotter Nov 3, 2014 9:22 PM

B.C.'s LNG tax moves buoy Chevron’s interest

Globe & Mail , Vancouver, Nov 3, 2014 - http://www.theglobeandmail.com/repor...ticle21420331/

Quote:

Chevron Corp. has welcomed the B.C. government’s plan to lighten the tax load on liquefied natural gas projects as the U.S. energy giant seeks Asian customers for Canadian LNG....

...San Ramon, Calif.-based Chevron, which reported Friday that its third-quarter profit rose 13 per cent to $5.59-billion (U.S.), is welcoming the revised tax regime.

“I think that what we are satisfied with is that the British Columbia government is very attentive to the realities of the industry. They’ve listened to what we have said, they’ve listened to what the buyers have said, and I think they made some very good moves in terms of what reality is out there and what it takes to make these projects economic,” said Jeff Shellebarger, president of Chevron North America Exploration and Production Co.

The Canadian units of Chevron and Houston-based Apache Corp. each own 50 per cent of Kitimat LNG, but Apache said in July that it will exit the joint venture.

“Apache has announced their intent to fully exit the project. We’re still committed to this project,” Mr. Shellebarger said during a conference call with industry analysts.

He cautioned that Chevron won’t make a final investment decision until buyers have been secured to accept LNG deliveries from Kitimat in northwestern British Columbia. Chevron wants to sign up long-term Asian customers for at least 60 per cent of Kitimat LNG’s production.

lubicon Nov 4, 2014 7:19 PM

That's definitely good news, now all Chevron needs to do is find a buyer for Apache's stake.

milomilo Nov 4, 2014 7:42 PM

Where is all this natural gas going to come from? All the articles focus on the port facilities, but is large scale drilling (and fracking?) going to be neccesary also? Does the gas extraction rely on the LNG facilities being built?

Aside from that, I hope this goes through. Not only for BC's economy, but I'd imagine LNG producers will be supporters of the Northern Gateway - the pipeline will be mutually beneficial.

MalcolmTucker Nov 4, 2014 8:16 PM

Gas to come from shale from BC NE for the most part, depending on seasonality maybe Alberta (depends if there is geology to support a cheap storage site in BC).

milomilo Nov 4, 2014 8:27 PM

Quote:

Originally Posted by MalcolmTucker (Post 6794809)
Gas to come from shale from BC NE for the most part, depending on seasonality maybe Alberta (depends if there is geology to support a cheap storage site in BC).

That would probably be good news for Alberta then - I'd imagine most of that work would be based out of Grande Prairie, at least initially.

MalcolmTucker Nov 4, 2014 9:09 PM

Quote:

Originally Posted by milomilo (Post 6794830)
That would probably be good news for Alberta then - I'd imagine most of that work would be based out of Grande Prairie, at least initially.

Fort St. John. Most of the back office work, geology, financing, and engineering is Alberta though.

logan5 Nov 5, 2014 1:00 AM

Quote:

Originally Posted by lubicon (Post 6778556)
I doubt that will happen. Their defacto HQ is in Calgary now and I don't see that changing.

That would be a slap in the face to British Columbia. Extract natural gas in NE BC, run the gas through pipelines in BC, then ship it from the west coast of BC, while the high paying corporate jobs are in Calgary. I hope the provincial government will be putting pressure on Petronas and others to have a large corporate presence in Vancouver. We're giving them a nice tax break only to have them outsource jobs to Alberta?

craneSpotter Nov 5, 2014 8:41 AM

Quote:

Originally Posted by logan5 (Post 6795214)
That would be a slap in the face to British Columbia. Extract natural gas in NE BC, run the gas through pipelines in BC, then ship it from the west coast of BC, while the high paying corporate jobs are in Calgary. I hope the provincial government will be putting pressure on Petronas and others to have a large corporate presence in Vancouver. We're giving them a nice tax break only to have them outsource jobs to Alberta?

Not to worry :)

The serious LNG proposals are all consortiums of existing foreign energy companies... some with Canadian subsidiaries. They will (or have) incorporate new LNG companies to build and operate the plants, which for the most part will be HQ'd in Vancouver. Plus much of the engineering will be done in field offices in Vancouver and on site. Another good thing is that the financing for the plants is foreign, so LNG may bring much needed foreign investment into Canada's oil/gas industry, which has softened recently.

Almost all the jobs for construction and on-going operations/administration are BC based (although expect some fabrication to take place in Asia and it is unknown how many foreign workers will be involved). The provincial government will also get a boost in revenues from increased gas royalties :)

Of course Alberta will also benefit. Alberta is the centre of the nations energy industry. Engineering, designing/building/operating pipelines, drilling and servicing thousands of wells etc... Even Toronto will benefit through the financial aspects.

Most insiders are saying 3-4 plants are likely to be built. So the groups with existing experience and expertise with LNG infrastructure, shipping, relationships with large asian buyers and financing are most likely to proceed.

I'm just not sure about all that fracking...

Here is a snippet from the Pacific Northwest LNG (owned by Petronas 62%/Sinopec 15%/JAPEX 10%/Indian Oil 10%/PetroleumBRUNEI 3%) backgrounder:

Quote:

Pacific NorthWest LNG could create significant potential for northwest B.C. What would it mean economically for the province?

• 330 local, long-term careers operating the facility. Pacific NorthWest LNG is planning a training program for local workers to become facility process operators, which comprises at least one third of the workforce needs at the LNG plant.

• Approximately 300 spinoff jobs to support facility operations in the local service sector.

• 130 careers at Pacific NorthWest LNG’s Vancouver office.

• Up to 4,500 jobs during peak construction.

– Workforce needs during construction include trades people, labourers and trades helpers, heavy equipment operators, truck drivers, engineers, managers and support staff.

• Once in operation, Pacific NorthWest LNG will contribute more than $1 billion annually to federal, provincial and municipal governments in various taxes and royalties.
– In comparison, the provincial government collected a little over $600 million in royalties from the forest industry in 2013.


MalcolmTucker Nov 5, 2014 3:51 PM

Quote:

Originally Posted by craneSpotter (Post 6795550)
Not to worry :)

The serious LNG proposals are all consortiums of existing foreign energy companies... some with Canadian subsidiaries. They will (or have) incorporate new LNG companies to build and operate the plants, which for the most part will be HQ'd in Vancouver. Plus much of the engineering will be done in field offices in Vancouver and on site. Another good thing is that the financing for the plants is foreign, so LNG may bring much needed foreign investment into Canada's oil/gas industry, which has softened recently.

Almost all the jobs for construction and on-going operations/administration are BC based (although expect some fabrication to take place in Asia and it is unknown how many foreign workers will be involved). The provincial government will also get a boost in revenues from increased gas royalties :)

Of course Alberta will also benefit. Alberta is the centre of the nations energy industry. Engineering, designing/building/operating pipelines, drilling and servicing thousands of wells etc... Even Toronto will benefit through the financial aspects.

Most insiders are saying 3-4 plants are likely to be built. So the groups with existing experience and expertise with LNG infrastructure, shipping, relationships with large asian buyers and financing are most likely to proceed.

I'm just not sure about all that fracking...

Here is a snippet from the Pacific Northwest LNG (owned by Petronas 62%/Sinopec 15%/JAPEX 10%/Indian Oil 10%/PetroleumBRUNEI 3%) backgrounder:

I guess Saskatchewan, Newfoundland, and Nova Scotia have headquarters already?

Quote:

Originally Posted by logan5 (Post 6795214)
That would be a slap in the face to British Columbia. Extract natural gas in NE BC, run the gas through pipelines in BC, then ship it from the west coast of BC, while the high paying corporate jobs are in Calgary. I hope the provincial government will be putting pressure on Petronas and others to have a large corporate presence in Vancouver. We're giving them a nice tax break only to have them outsource jobs to Alberta?

Slap in the face? How about reality. If you want to be stuck with a small number of employees, having to pay relocation to recruit every single one, isolated from their professional networks, paying them more to maintain the same quality of life in Vancouver as in their existing lives then sure.

The large corporate support system is needed on the extraction side, and those jobs are already in Calgary. The pipeline office jobs are already in Calgary (and for Enbridge, Edmonton).

Having an office in Vancouver is neither here nor there. The corporate taxes will be collected in BC no matter what.

Building an active cluster that generates substantial uplift in Vancouver isn't really in the cards. For the lower mainland, this is purely a rentier venture.


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