Canada: B.C. Royalty Program Supports LNG Industry Potential

British Columbia has approved $115.8 million in royalty credits, which will lead to the construction of 12 new infrastructure projects in northeast B.C.

These credits, administered under B.C.’s 2013 Infrastructure Royalty Credit Program, are designed to support the construction of new resource roads and pipelines, which will help the advancement of a liquefied natural gas (LNG) industry in the North.

Drilling operations, resulting in new royalty revenue for the government, will also increase. Five years from now, the 2013 royalty credits are expected to generate revenues of about $445 million for the Province.

The 2013 program will also generate over $320 million in new capital spending by industry. Service-sector companies will benefit as they will be contracted to build each new project. Over 1,500 jobs will be generated by this activity.

B.C.’s royalty program reflects a company’s cost to extract resources which are consistent and set at very similar levels with royalty programs in other jurisdictions. This is the 12th instalment of the program. The first instalment was launched in 2004.

To date, the Infrastructure Royalty Credit Program has supported the development of 78 resource roads and 140 pipeline projects. This accounts for more than $1.9 billion in capital investment and over $6 billion in private-sector drilling.

The government of British Columbia is proactively pursuing LNG export development because it will create jobs and economic growth. As part of government’s LNG plans and commitment to strengthen the economy, work is underway to finalize a BC Prosperity Fund. This fund will secure over $100 billion in future wealth to help government eliminate the provincial debt over time, reduce cost burdens on families and support important services like health care and education.

Rich Coleman, Minister of Natural Gas Development: “We are creating jobs for British Columbians through the growth of our natural gas sector and the development of a new export industry. Our infrastructure royalty credit program is helping us build the capacity we need to make B.C. a world leader in natural gas supply and export.”

Quick Facts:

• The majority of projects will be built across a wide area north of Fort St. John, specifically in the Montney play, one of B.C.’s most promising and growing resource areas.
• The 2013 Infrastructure Royalty Credit Program was first announced at the Fuelling the Future: Global Opportunities for LNG in B.C. conference in Vancouver last February.
• The Infrastructure Royalty Credit Program is unique to B.C., and has kept the province’s natural gas sector competitive by attracting investment and facilitating growth.

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LNG World News Staff, September 24, 2013; Image: Apache Canada