VANCOUVER - The Project Development Agreement (PDA) signed by the Province and Pacific NorthWest LNG marks a major milestone on the path to realizing the largest capital investment in B.C.’s history, Finance Minister Michael de Jong said in publicly releasing the full agreement today.
The agreement between the Province and Pacific NorthWest LNG is the first of its kind with an LNG proponent. It sets out the ratification process for the company and for government, identifies important milestones toward achieving project certainty, and provides long-term certainty that the investments will be treated equitably and consistently over the term of the agreement.
The agreement provides the proponent with assurance through legislation to be proposed and debated in the legislature that it will not face significant increases in certain specific taxes and environmental charges for the specified term of the agreement:
- The LNG Income Tax.
- The Natural Gas Tax Credit.
- The Carbon Tax (specific to liquefying natural gas at an LNG facility).
- The key features of greenhouse gas emissions regulatory scheme at an LNG facility.
The PDA does not provide the proponent with assurance on laws of general application, such as changes to provincial sales tax or corporate income tax.
Pacific NorthWest LNG plans to build an LNG facility on Lelu Island, located in the District of Port Edward on land administered by the Prince Rupert Port Authority. The first phase of the project would consist of two liquefaction trains, two LNG storage tanks, marine infrastructure with two berths for LNG carriers, a material offloading facility, as well as administration and auxiliary buildings. The facility would liquefy and export natural gas produced by Progress Energy Canada Ltd. in northeast B.C. for transport to Lelu Island by the Prince Rupert Gas Transmission project proposed to be built, owned and operated by TransCanada Pipelines Ltd.
Pacific NorthWest forecasts the US$36-billion investment is expected to support up to 4,500 jobs at peak construction, 330 direct operational long-term jobs, and 300 local spin-off jobs, in addition to significant new revenues for local government, the provincial government, and the federal government.
de Jong signed the PDA on behalf of the Province May 20, 2015, in Vancouver, initiating a ratification process by both the proponent and the B.C. legislature. Government is recalling the legislature on July 13, 2015, to introduce and publicly debate legislation that will enable the PNW LNG agreement and future potential agreements.
https://www.facebook.com/BCJobsPlan/posts/10153240904438241Quote:
Michael de Jong, Minister of Finance -
“There are significant benefits for B.C.’s economy associated with the development of LNG activity. At approximately US$36 billion at total build-out and operation, this project represents the largest capital investment in the province’s history. And with this project come jobs for British Columbians and a new revenue stream from taxes and royalties that will provide benefits for British Columbians well into the future.”
Rich Coleman, Minister of Natural Gas Development -
“We are creating jobs and stimulating economic growth through the development of a new export industry. This project development agreement with Pacific NorthWest LNG is a way to secure those benefits.”
Quick Facts:
- Between 2015 and 2020, Asian economic growth and the switch to a cleaner fuel will almost double the demand for liquefied natural gas.
- B.C. has a natural gas supply estimated at 2,933 trillion cubic feet. This could support domestic and export markets for the next 150 years.
- Natural gas is the cleanest-burning of all fossil fuels and results in lower greenhouse gas emissions and pollution when it replaces coal-fired generation.
Learn More:
For more information on Liquid Natural Gas in British Columbia, check out LNG in BC: http://engage.gov.bc.ca/lnginbc/
Factsheet: Strong framework for a new industry benefits B.C.
Project development agreements (PDAs), signed between the Province and Liquefied Natural Gas (LNG) proponents, will provide certainty for government and for the proponents’ long-term costs regarding certain provincial taxation and environmental laws and regulations applicable to LNG facilities.
Factsheet: Further key measures in Project Development Agreement
The Province continues to consult with Tsimshian Nations - Lax Kw'alaams, Metlakatla, Gitxaala, Kitsumkalum, Kitselas and Gitga'at First Nations - regarding the Pacific Northwest LNG project. B.C. has also engaged with 19 First Nations along the proposed Prince Rupert Gas Transmission Pipeline route. Fourteen agreements related to the facility and pipeline have been achieved to date.
Factsheet: Industry optimism as Province releases first LNG PDA
A copy of the powerpoint is available: http://ow.ly/PfXnH
A copy of the Project Development Agreement is available: http://ow.ly/PfXxd
Media Contacts:
Jamie Edwardson
Ministry of Finance
250 356-2821
BACKGROUNDER
B.C.’s LNG accomplishments growing
British Columbia’s liquefied natural gas (LNG) industry is gaining momentum with concrete signs of progress taking place over the last three years.
Here are some of the major accomplishments to date:
- As of June 2015, there are 19 LNG export proposals in B.C. When the LNG Strategy was released, there were two facilities proposed for development. A list of LNG proposals can be found at: https://news.gov.bc.ca/factsheets/factsheet-lng-project-proposals-in-british-columbia
- Ten LNG proposals have received export approval from Canada’s National Energy Board. More details and a chart can be found online at: http://www.neb-one.gc.ca/pplctnflng/mjrpp/lngxprtlcnc/index-eng.html
- Provincial environmental assessment certificates have been issued for seven LNG projects, with others under review. Projects with certification are: Kitimat LNG, LNG Canada, Pacific NorthWest LNG, Coastal GasLink Pipeline (for LNG Canada), Pacific Trail Pipelines (for Kitimat LNG), Prince Rupert Gas Transmission pipeline (for Pacific Northwest LNG) and the Westcoast Connector Gas Transmission pipeline (for Prince Rupert LNG). More information is online at: www.eao.gov.bc.ca
- A project development agreement (PDA) and accompanying adherence agreements have been reached between the Province and Pacific NorthWest LNG. A long-term royalty (LTRA) was also reached with the producer - the North Montney Joint Venture - which specifies royalty rates over a 23-year timeframe and minimum levels of commercial investments. More details can be found at: https://news.gov.bc.ca/stories/agreements-lay-out-path-for-final-decision-on-lng-project
- Nearly 90% of the 32 First Nations with proposed pipelines through their traditional territories have indicated their support through one or more pipeline benefits agreements. More details can be found at: https://news.gov.bc.ca/factsheets/partnering-with-first-nations-on-lng-development
- LNG-Buy BC will create long-term partnerships for B.C. businesses to support LNG projects during planning, construction, and operation. The online registry launched by British Columbia is accessible at: www.LNGBuyBC.ca
- The Province released the B.C.'s Skills for Jobs Blueprint to prepare for the economic growth ahead. A growing natural gas sector will create thousands of jobs and the Skills for Jobs Blueprint will ensure British Columbians are trained and first-in-line for new employment. The LNG industry could create 100,000 jobs for British Columbians. More details about the Skills for Jobs Blueprint can be found by visiting: www.workbc.ca
- The Province has introduced and passed the Greenhouse Gas Industrial Reporting and Control Act - legislation to ensure B.C. has the cleanest LNG facilities in the world. The centrepiece of the plan is a greenhouse gas emissions intensity benchmark. More details can be found at: https://news.gov.bc.ca/stories/bc-to-have-worlds-cleanest-lng-facilities
- The Liquefied Natural Gas Income Tax Act has been released, providing proponents the certainty they need to make investment decisions, while ensuring British Columbians benefit from the revenue generated by LNG production. More details can be found at: https://news.gov.bc.ca/stories/lng-income-tax-ensures-fair-returns-for-british-columbians-certainty-for-industry
- The rates for LNG proponents to connect to BC Hydro’s electrical grid have been finalized, providing details for industry to plan power costs. Industry investments in new or upgraded infrastructure will ensure ratepayers are protected. The first power agreement reached was between BC Hydro and LNG Canada. More details can be found at: https://news.gov.bc.ca/stories/terms-finalized-for-lng-customers-using-bc-hydro-system.
- The Province has hosted two international conferences, with a third event scheduled for Oct. 14-16, 2015. The first event - Fuelling the Future: Global Opportunities for LNG in BC - was held at the Vancouver Convention Centre on February 25-26, 2013. The second conference was another success, with over 1,400 delegates attending. It is considered to be the largest event of its kind in B.C.’s history. More details about the 2015 conference can be found online at: www.lngconference.ca
- A series of seminars was organized across the province that provided people with the facts about natural gas and British Columbia’s LNG prospects. Each seminar included a series of interactive, hands-on sessions. Science World British Columbia was a featured participant. More details can be found at: https://news.gov.bc.ca/stories/liquefied-natural-gas-lng-seminars-showcase-science
Media Contacts:
Sandra Steilo
Media Relations
Ministry of Natural Gas Development
250 952-0617
BACKGROUNDER
Liquefied Natural Gas (LNG) in British Columbia
British Columbia’s liquefied natural gas (LNG) industry is gaining momentum with concrete signs of progress taking place over the last three years.
Here is a timeline of some of the highlights, including details applicable to the evolution of Pacific NorthWest LNG:
Sept. 22, 2011: The Province of British Columbia commits to a liquefied natural gas (LNG) export industry with the release of The BC Jobs Plan.
Feb. 3, 2012: The Province of British Columbia releases an LNG Strategy to support growth and the prospects of exporting natural gas.
Feb. 25-26, 2013: Canada’s first international LNG Conference is held in Vancouver. More than 500 participants from 192 companies spanning eight countries attend.
Dec. 16, 2013: Pacific NorthWest LNG receives export approval from Canada’s National Energy Board, marking the third proposal to do so in B.C.
May 21-23, 2014: Canada’s second international LNG Conference, hosted by the Province of British Columbia, is held in Vancouver. Over 1,400 delegates attended. The event is currently the largest of its kind in B.C.
Oct. 20, 2014: The Province introduces the Greenhouse Gas Industrial Reporting & Control Act - legislation to ensure B.C. has the cleanest LNG facilities in the world.
Oct. 21, 2014: The Province introduces the Liquefied Natural Gas Income Tax Act and a Natural Gas Tax Credit under the Income Tax Act to provide proponents with the certainty they need to make investment decisions, while ensuring British Columbians benefit from revenue generation.
Nov. 18, 2014: The LNG-Buy BC online tool launches.
Nov. 20, 2014: The B.C.-Nisga’a Nation Pipeline Benefits Agreement is signed (Prince Rupert Gas Transmission Pipeline project).
Nov. 25, 2014: The Province issues Environmental Assessment Certificates to the Pacific NorthWest LNG export facility and the Prince Rupert Gas Transmission pipeline.
Feb. 16, 2015: New provincial legislation - the Federal Port Development Act - is introduced to regulate the construction, operations and permitting of LNG development on federal port lands, such as the Port of Prince Rupert.
March 25, 2015: The administrative and enforcement components of the Liquefied Natural Gas Income Tax Act are introduced.
May 20, 2015: The Government of British Columbia reaches a Project Development Agreement (PDA) with Pacific NorthWest LNG and a Long-Term Royalty Agreement (LTRA) with the North Montney Joint Venture.
June 1, 2015: The Province reaches pipeline benefits agreements with Doig River First Nation and Halfway River First Nation for TransCanada’s proposed Prince Rupert Gas Transmission project. Agreements were reached earlier with the Nisga’a Nation, Gitxaala First Nation, Kitselas First Nation, Yekooche First Nation, and the Lake Babine Nation.
June 5, 2015: The Liquefied Natural Gas Income Tax Act Regulations are deposited.
June 11, 2015: Pacific NorthWest LNG announces preliminary final investment decision (FID) subject to two conditions: approval of the PDA by the Legislative Assembly of British Columbia and a positive regulatory decision on the export facility’s environmental assessment by the Government of Canada.
Media Contacts:
Sandra Steilo
Media Relations
Ministry of Natural Gas Development
250 952-0617