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The British Columbia legislature passed late Tuesday evening the Liquefied Natural Gas Project Agreements Act, removing one of two final conditions to the start-up of the first LNG plant in the province.
The bill means that the Pacific NorthWest LNG project can now count on a 25-year fiscal deal that protects it from targeted tax increases.
In this age of energy-infrastructure bashing, aboriginal unrest, high environmental expectations, low oil and gas prices, the B.C. government’s ratification of the first LNG project agreement is historic.
“We believe we have arrived at a balanced approach that ensures we represent a competitive jurisdiction where proponents can invest and derive a fair rate of return, while at the same time ensuring that British Columbians who own the resource that lies at the heart of this industry receive a fair return for granting access to that resource,” B.C. Finance Minister Michael de Jong said in an interview.
“Today we are able to say with confidence that an international consortia of companies, including companies from Malaysia, China, Japan and India and others, agreed with us.”
The Petronas-led group that is proposing the project near Prince Rupert plans to invest US$36-billion, create 4,500 construction jobs, generate $9 billion in revenues in its first decade of operation by shipping B.C. gas to Asia in liquid form from a liquefaction plant on Lelu Island.
It will also provide a new market for the struggling natural gas industry in Western Canada.
B.C. premier Christy Clark’s government recalled the legislature for an extraordinary summer session to pass the law. After a week of debate, the bill passed with 43 Liberals voting yes, and with 27 New Democrats and Green Party member Andrew Weaver opposing the bill. The NDP wanted the province to drive a harder bargain, and Weaver believes that the LNG industry “cannot coexist” with B.C.’s greenhouse gas reduction targets.
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