• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 1 min Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 3 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 1 day IMO 2020 could create fierce competition for scarce water resources
  • 3 hours Total nonsense in climate debate
  • 4 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 1 day IMO2020 To scrub or not to scrub
  • 15 hours Theresa May to Step Down
  • 1 day Devastating Sanctions: Iran and Venezuela hurting
  • 6 hours Will Canada drop Liberals, vote in Conservatives?
  • 1 day Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 7 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 3 hours Apple Boycott in China
  • 7 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
Alt Text

Trinidad And Tobago Doubles Down On Gas Production

An increase in gas production…

Alt Text

Qatar Doubles Down On LNG Expansion Despite Saudi Blockade

Despite Saudi Arabia’s economic blockade…

Alt Text

Vietnam Is On The Verge Of An Energy Crisis

As Vietnam looks down the…

Joao Peixe

Joao Peixe

Joao is a writer for Oilprice.com

More Info

Trending Discussions

Supermajors Balk at Canadian LNG Profit Tax

Oil and gas companies hoping to win big on Canada’s nascent liquefied natural gas (LNG) export industry are balking at a new gas tax proposed for British Columbia that is great for the province but tough on the industry wallet.

Profits from LNG projects will be taxed at an initial rate of 1.5%, under the proposal, British Columbia Finance Minister Michael de Jong told reporters on 26 February. The rate will rise to as much as 7% after companies recover the costs of building the shipping terminals.

A 7% levy on profits works out to a $0.50/MBtu surcharge, Ziff Energy analysts say - "not a small number when you consider there's a lot of competition out there."

Related Article: Small Companies Poised to Ride Canadian Natural Gas Wave

Shell Canada and other supermajors in this game say the proposed tax could hinder the province’s competitiveness.

"We need something that’s globally competitive if we, in British Columbia, are going to build an LNG industry," said Shell Canada spokesman David Williams.

Shell Canada has proposed a $12-billion plant in Kitimat, with partners PetroChina, Korea Gas and Mitsubishi. The project already has federal export approval and is now awaiting environmental assessment. A final investment decision (FDI) could hinge on the new tax policy.

Exxon Mobil and Chevron are also eyeing British Columbia LNG projects—and all were looking for clarifications of pending tax policies, which has now arrived however unwelcome.  

But provincial officials see a chance here to bring in up to $1 trillion by 2046 through the LNG sector alone.

The attraction, despite the tax proposal, is clear: there is plenty of money to be made shipping low-cost Canadian gas to LNG-starved Asian markets, where it fetches a much higher price.

Related Article: Why Europe Won't See Canadian Crude Anytime Soon

And, as provincial officials have been quick to point out: British Columbia tax and royalty rates as proposed will still be lower than in Australia and the US—at least in the five states competing with LNG projects in the sector.  

BC Finance Minister Jong’s response to the supermajor balking is to take it in stride.

“Of course they want zero,” he said, but the proposed tax regime still puts British Columbia ahead of its potential competitors.   

The province of British Columbia is promising tax legislation this fall, and is expected to reveal more details about environmental regulation and benefit-sharing plans for First Nations this spring.

By Joao Peixe of Oilprice.com




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News