The Province has approved $120 million in royalty deductions which will lead to the construction of 21 new infrastructure projects in northeast B.C.

In addition to supporting capital needs to B.C.'s emerging liquefied natural gas (LNG) export industry, the development of these projects will create over 1,650 direct jobs.

Minister of Energy, Mines and Natural Gas Rich Coleman announced British Columbia's eleventh instalment of the Infrastructure Royalty Credit Program this afternoon during the BC Energy Conference in Dawson Creek.

The 2012 program supports the commitments of the BC Jobs Plan by expediting project development needed to support growth in the province's natural gas sector and the prospects of LNG. It also supports the government of B.C.'s commitment to increase natural gas activities by stimulating industry work today, which will lead to royalty-generating production. Five years from now, the 2012 allocation of infrastructure royalty credits is expected to have generated new net incremental royalties of approximately $300 million.

As in previous years, Industry will fund the entire cost of each infrastructure project. Companies can then recover up to 50 per cent of an approved project's cost through deductions which will reduce the royalties they must later pay to government. This year's program is expected to generate approximately $260 million in new industry capital spending in B.C.

Since the release of the 'Canada Starts Here: The BC Jobs Plan', the government of British Columbia has raised the profile of B.C.'s LNG potential, with the goal of having three facilities in operation by 2020. These three facilities will result in:

• Diversified market access for natural gas which will strengthen the economics of production activities in B.C. and support jobs and service sector work in the Northeast.
• 60,000 person years of employment for construction work, including 1,500 kilometres of connecting pipelines, and up to 1,400 permanent B.C. jobs.
• Industry investment of up to $48 billion between next year and 2022.
• A Gross Domestic Product benefit of $600 billion over a 30-year timeframe.

The BC Energy Conference is taking place in Dawson Creek, Sept. 19-21. The conference, hosted annually in northeast B.C., is focusing on the effects of global markets for energy resources.

Quotes:

Minister of Energy, Mines and Natural Gas Rich Coleman -

"Our Infrastructure Royalty Credit Program will result in new roads to help industry access resource areas while also supporting pipeline construction to move B.C.'s natural gas out of the field and to the marketplace."

"We have a once-in-a-lifetime opportunity to develop and prosper from an entirely new export industry and this program is helping us build the capacity we need to make it happen."

Parliamentary Secretary for the Northeast to the Minister of Energy, Mines, and Natural Gas and MLA for Peace River North, Pat Pimm -

"The B.C. government is focused on families and supporting opportunities across the province. The Northeast has huge role to play as the economic hub of the province's oil and gas activity."

"The Infrastructure Royalty Program will create service-sector opportunities and support long-term road and pipeline needs for job creation."

Quick Facts:

• Since its inception in 2004, the Infrastructure Royalty Credit Program has led to the development of 81 new resource roads and 115 new pipeline projects. This has accounted for more than $1.4 billion in capital investment and over $5 billion in private-sector drilling and other investment activities.
• The Infrastructure Royalty Credit Program is unique in North America, and has been vital for ensuring that BC remains competitive relative to other North American jurisdictions in attracting investment for oil and gas development.

Learn More:

British Columbia's Natural Gas Strategy: Fuelling B.C.'s Economy for the Next Decade and Beyond, as well as the Province's LNG Strategy: A Strategy for B.C.'s Newest Industry, can be found and downloaded at:

http://www.gov.bc.ca/ener/natural_gas_strategy.html

Details about the Infrastructure Royalty Credit Program, including the Request for Applications and information about previous instalments of the program, can be found at: http://www.empr.gov.bc.ca/OG/oilandgas/royalties/infdevcredit/Pages/default.aspx

For more information on B.C.'s royalties and royalty programs: http://www.empr.gov.bc.ca/OG/oilandgas/royalties/Pages/default.aspx

A backgrounder follows.

Contact:

Sandra Steilo
Ministry of Energy and Mines
250 952-0617

BACKGROUNDER

Sept. 20, 2012 Ministry of Energy, Mines and Natural Gas

Royalty program helps LNG prospects while creating jobs

The Province has awarded $120 million in royalty deductions under the 2012 Infrastructure Royalty Credit Program to 11 companies for 21 oil and gas infrastructure projects.

The 11 companies are: Aduro Resources, ARC Resources, Canadian Natural Resources Limited, Cutbank Ridge Partnership, Encana Corporation, Husky Oil, Lone Pine Resources Canada, Progress Energy, Shell Canada Energy, Storm Resources, and Yoho Resources.

The 21 projects are located across a wide area of northeast B.C. Three of the projects are located in the Fort Nelson area, where the Horn River and Jean Marie gas plays are located. Another ten projects are proposed to be built across a wide area north of Fort St. John. Seven projects will be west of Dawson Creek in the Montney play, with the final project south of Dawson Creek.

Contact:

Sandra Steilo
Ministry of Energy and Mines
250 952-0617