BC announces major new incentives as LNG Canada considers final investment decision

A decline in spending since 2014 due to weak energy prices could create a rebalancing LNG demand boom beginning in the mid 2020s.  Shell photo.

“LNG Canada proposal has the potential to earn tens of billions of dollars and create thousands of jobs for British Columbians over the life of the project.” – Horgan

The BC NDP government has embraced liquefied natural gas development and provided generous new incentives as a means to kick start the stalled development of the West Coast LNG industry.

Premier John Horgan says his government is overhauling the policy framework for future projects, while ensuring those projects adhere to B.C.’s climate targets, with LNG Canada making a final investment decision on the $40 billion, four billion cubic feet a day project later this year, according to a press release.

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BC Premier John Horgan.

LNG Canada is a joint venture company comprised of Shell Canada Energy (50%), and affiliates of PetroChina (20%), Korea Gas Corporation (15%), and Mitsubishi Corporation (15%) That is proposing to build an LNG export terminal in Kitimat, BC.

“Our new approach welcomes investment that puts our province’s people and future first, and rejects the old ways of resource development at any cost. Our obligation is to the people who call British Columbia home, and our job is to get the best deal for them and the generations that follow,” said Horgan.

At the centre of the discussions with LNG Canada is a revised fiscal framework that is designed to put natural gas development on a level playing field with other industrial sectors, accessing the same fiscal policies and working within the same overall B.C. framework to achieve greenhouse gas (GHG) reductions.

The new framework, to which LNG Canada will be subject, provides:

  • Relief from provincial sales tax (PST), in line with the policy for manufacturing sectors, subject to repayment in the form of an equivalent operational payment.
  • New GHG emission standards under the Clean Growth Incentive Program, announced in Budget 2018.
  • General industrial electricity rates consistent with other industrial users in B.C.
  • Elimination of the LNG income tax that had required LNG-specific tax rates.

“The LNG Canada proposal has the potential to earn tens of billions of dollars and create thousands of jobs for British Columbians over the life of the project. It’s a private-sector investment that could benefit our province for decades to come, but not at any price – we need to make sure the values British Columbians believe in come first,” Horgan said in a press release.

The government says that under the new approach, all projects should guarantee a fair return for B.C.’s natural resources, guarantee jobs and training opportunities for British Columbians, respect and make partners of First Nations, protect B.C.’s air, land and water, including “living up to the Province’s climate commitments.”


The LNG Canada project would see the construction of a natural gas pipeline from northeast B.C. to Kitimat, where a new terminal will process and ship LNG to Asian markets. It is expected to create up to 10,000 construction and up to 950 full time jobs in northern B.C.

This comes at a time when B.C. is in a fierce legal and political battle with the Federal Government and Alberta over the Trans Mountain pipeline.

“No premier or government can dismiss this kind of critical economic opportunity for the people of British Columbia. But neither will we turn our back on our commitment to climate targets, or our path to reconciliation with Indigenous peoples,” said Horgan.

Horgan says that Shell and its joint-venture partners have worked constructively to satisfy the provincial government’s conditions for LNG, and British Columbia expects LNG Canada will continue to do so moving forward. LNG Canada is also working to achieve global leadership in low-emissions technology and operations.

Chevron and its partners have also expressed continued interest in developing its project in northern B.C. and is focusing on the use of new low-emissions liquefaction technology.

“We committed, during the election campaign, to reduce our greenhouse gas emissions by 40% below 2007 levels by 2030, and by 80% by 2050. That remains our goal,” Horgan said.

“We cannot achieve the necessary reductions in greenhouse gas emissions and do our part in protecting the global environment without a significant shift to a low carbon economy. The work for all of us – in government, business, labour and beyond – is only just beginning. And all resource development proposals must be considered within the context of our global commitment to protecting our air, land and water.”

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