The Province has approved $120 million in royalty deductions that will create jobs and support the construction of 15 infrastructure projects through British Columbia’s Infrastructure Royalty Credit Program (IRCP).
The IRCP keeps B.C.’s natural gas sector flourishing by attracting investment in new roads and pipeline projects, which facilitates growth in communities like Fort St. John, Dawson Creek and Fort Nelson.
As a result of this year’s program, approximately $185 million is expected to reach service-sector companies, creating more than 1,640 new jobs.
In addition to new economic development, royalty revenue for government increases as a result of new wells being drilled, after the infrastructure is built. Five years from now, the 2016 IRCP is expected to generate approximately $153 million in net revenue for the Province.
The IRCP also supports B.C.’s liquefied natural gas (LNG) export opportunity, with its prospects relying on exploration and production activities – known as upstream development – happening in the province’s northeast communities.
The first instalment of the IRCP occurred in 2004. Since then, the program has supported the development of over 300 resource roads and pipeline projects in northeast B.C., representing more than $2.7 billion in private-sector capital investment.
The IRCP was expanded in February 2016 by offering $120 million in royalty credits annually over the next three years, guaranteeing the program will continue in 2017 and 2018. The credits awarded today are for the 2016 program only. Future credits will have separate request for applications which usually take place near the start of each calendar year.
Rich Coleman, Minister of Natural Gas Development –
“This royalty incentive has supported development in our natural gas sector for over a decade, and it has helped British Columbia grow into a global competitor for new energy supply and export. In addition to a substantial return on the investments made by industry, job creation, economic development and new royalty revenue are all guaranteed as a result of the program.”
Mike Bernier, Minister of Education and MLA for Peace River South –
“The Infrastructure Royalty Credit Program is unique to B.C. and an important generator of employment and investment across the north. It also supports long term planning and helps our natural resource industry with the necessary infrastructure to expand our markets.”
- The 15 projects will be built across a wide region of northeastern B.C. – from the area north-west of Fort Nelson, to the northern parts of Fort St. John and the southern landscape of Dawson Creek.
- There are 10 companies and/or partnerships involved in the 15 separate projects. The companies/partnerships with projects approved, and eligible to receive royalty deductions once their project is built, are ARC Resources, Black Swan Energy, Canadian Natural Resources, Chevron Canada, Cutbank Ridge Partnership, Leucrotta Exploration, Storm Resources, Tourmaline Oil, Venturion Oil, and Woodside Energy International (Canada).
For more information on B.C.’s royalties and royalty programs: http://www2.gov.bc.ca/gov/content/industry/natural-gas-oil/oil-gas-royalties
LNG in B.C. information: www.LNGinBC.ca
For a list of LNG proposals in B.C.: https://news.gov.bc.ca/factsheets/factsheet-lng-project-proposals-in-british-columbia
A backgrounder follows.