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[BC省新聞] Petronas threatens to pull out

Petronas threatens to pull out of $10-billion LNG project near Prince Rupert

Read more: http://www.vancouversun.com/business/energy/Petronas+threatens+pull+billion+project+near+Prince/10234534/story.html#ixzz3EL4UCS6W
TORONTO - Malaysian state-owned energy company Petronas is threatening to pull out of a liquefied natural gas project on the north coast of British Columbia, the Financial Times reported Thursday.
The newspaper said Petronas chief executive Shamsul Abbas was ready to call off the $10-billion project amid a delayed regulatory approval process, plans by the provincial government to impose an LNG tax and a “lack of appropriate incentives.”
“Rather than ensuring the development of the LNG industry through appropriate incentives and assurance of legal and fiscal stability, the Canadian landscape of LNG development is now one of uncertainty, delay and short vision,” Abbas told the Financial Times.
Abbas is expected to visit Canada later this week.
Petronas is leading the Pacific Northwest LNG project near Prince Rupert. The company holds a 62 per cent stake in the project.
Its partners include China’s Sinopec with a 15 per cent stake, Japex Montney with 10 per cent, Indian Oil Corp. Ltd. with 10 per cent and PetroleumBrunei with three per cent.
Pacific Northwest LNG is one of several projects that various companies have been considering as a way to export natural gas by tanker from the West Coast.
The B.C. government proposed earlier this year a two-tier LNG tax on income from liquefaction of natural gas at facilities in B.C.
Petronas bought Progress Energy Corp. in 2012 in a deal that was closely scrutinized by Ottawa.
If Petronas leaves, it won’t be the first energy company to depart since the government announced the LNG tax. Early in August, Houston-based Apache Corp., once Kitimat LNG’s lead proponent, announced it is selling off its stake in the $4.5 billion project. Chevron Corp., however, said it will continue with gas drilling in Kitimat despite the departure of its 50-per-cent partner.
Rich Coleman, B.C.’s minister of natural gas development, told a group of municipal politicians at the Union of B.C. Municipalities convention this week that they need to make sure they don’t raise industrial tax rates so high they scare off potential projects.
Coleman said he wants to make sure local governments don’t jeopardize a potential $175 billion LNG program by setting industrial tax rates too high. The B.C. government’s proposed LNG tax regime, which was unveiled in the February provincial budget, includes seven per cent on income from LNG facilities after capital costs are recovered.
Premier Christy Clark promised to finalize all government-imposed LNG costs by Nov. 30, including taxes, as well as costs related to meeting environmental standards and First Nations compensation. Petronas and Pacific Northwest LNG had warned the entire government tax burden was very large, and it needed clarity by the middle of this year to make its final investment decisions.
The government has said it is still refining the details of the tax regime and consulting with proponents before introducing relevant legislation this fall.
The Clark government promised an LNG windfall for the province in last year's provincial election, saying it could reap billions in revenue that would help pay for government services and erase the province’s debt.


Petronas, Malaysia’s state-owned oil and gas giant, says it may pull the plug on its massive liquefied natural gas (LNG) project in British Columbia, Britain’s Financial Times newspaper is reporting.

The Fortis BC liquefied natural gas storage plant at Mount Hayes near Ladysmith.

A nighttime view of Malaysia’s landmark Petronas Twin Towers in Kuala Lumpur.

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