Liberals to focus on LNG exports

The Globe and Mail

A file photo from January, 2009, shows a $190-million liquefied natural gas storage facility under construction on Mt. Hayes, outside Nanaimo. (Cam Craig/Terasen Gas)

The B.C. Liberal government is pinning its hopes on exports of liquefied natural gas as it looks to bolster the province’s long-term economic fortunes.

In Tuesday’s budget, the Liberals released two consultants’ reports to back up their rosy view of LNG.

Grant Thornton and Ernst & Young both used a 20-year horizon for projected LNG-related revenue. The government extrapolated the consultants’ information to come up with a 30-year time frame for $130-billion to $260-billion in revenue.

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Grant Thornton forecast from $132-billion to $185-billion in LNG-related revenue over 20 years, while Ernst & Young predicted it would be from $79-billion to $162-billion.

Neither consulting firm spelled out the impact of a new tax proposed on LNG exports to Asia. But their estimates do roll in existing provincial taxes and royalties, plus the potential new B.C. LNG revenue regime.

Separately, there will be a new 3-per-cent minimum royalty on deep natural gas wells that qualify for a taxation credit program. The Liberals say a financial floor must be established to collect those royalties because credits threaten to offset revenue.

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