Province greenlights Petronas LNG

A rare summer session of the legislature ended with the passing of a tax deal meant to get LNG export facilities built.

The B.C. government has passed legislation setting tax rates in a 25-year project development deal for what the government hopes is the first of a series of liquefied natural gas export facilities.

Premier Christy Clark said the project development agreement with Petronas-led Pacific Northwest LNG for the Port of Prince Rupert is complete from the government’s standpoint. She ruled out any further exemptions to the provincial sales tax that applies to investments in plant and pipelines that could reach $36 billion.

“We aren’t considering changing the way the PST is treated for this or any other projects,” Clark said, responding to comments by David Keane, president of the B.C. LNG Alliance.

Pacific Northwest still needs an environmental permit from the federal government, and approval from the Lax Kw’alaams Band, whose territory includes the Lelu Island site chosen for the LNG shipping terminal.

Stikine NDP MLA Doug Donaldson voted against the deal, saying it did not meet the three principles of environment, local economic benefits, and honouring aboriginal title.

The Lax Kw’alaams Band turned down a $1 billion offer.

The TransCanada Prince Rupert Gas Transmission Project pipeline that would deliver the gas crosses Gitxsan territory, where a Madii Lii camp is set up to stop construction.

Donaldson pointed out that if future governments chose to raise the carbon tax, all LNG companies would be reimbursed.

“That’s a pretty sweet deal for the companies. There are no provisions in the development agreement for local jobs or services, and that’s unlike the agreements signed in Australia; and Petronas said in their own environmental assessment application that up to 70 per cent of the construction jobs could be filled by temporary foreign workers … and they’ve also said it’s their intention to shift engineering and design work to what they call lower cost centres, so offshore obviously,” said Donaldson, adding since the federal environmental approval still has to happen, the province could have taken more time for a better deal despite Petronas’s conditional approval.

“The government buckled.”