The B.C. minister in charge of the liquefied natural gas industry says a commitment by Malaysia’s state-owned energy company to spend $36-billion over three decades on projects in B.C. helps vindicate the provincial government’s bets on the sector.
“We’re pretty enthused. It may put to bed some of the comments that people say that we’re pursuing a pipe dream,” Rich Coleman told a news conference on Monday to set the stage for a tour to South Korea, China and Malaysia promoting B.C.’s LNG sector.
The trip, which begins Friday, includes a tour of the Petronas LNG complex in Bintulu, Malaysia, described by the B.C. government as one of the world’s largest LNG facilities.
On Sunday, Malaysian Prime Minister Najib Rezak announced Petronas, the state company in his country, will spend $36-billion over about 30 years on various LNG efforts focused on B.C., including $11-billion for a proposed LNG export plant and $5-billion for a provincial pipeline. Still, the plan hinges on a final decision in 2014.
Mr. Najib announced the investment during a news conference with Canadian Prime Minister Stephen Harper ahead of the two leaders departing for the Asia-Pacific Economic Co-operation summit in Indonesia.
Mr. Coleman was reserved in his remarks on the news, saying he was pleased, but also cautious in noting the incremental nature of the investment as a series of pieces. “Petronas’ announcement was pretty broad,” he said.
The minister said the Liberal government, which touted its commitments to LNG during the recent provincial election that saw the Liberals re-elected with a majority, is now focused on nailing down an export tax regime that will confirm the rules for the sector.
He said detailed talks are under way with the sector to get to a “sweet spot” between the industry’s needs and something that works for B.C.’s interests.
“We’re very close to that sweet spot,” he said, noting he expected that details will be released in November.
“We’re going to have to lock it down with some complex legislation to make sure people know there is some certainty around their investment in British Columbia so someone can’t come in and arbitrarily change it after you have made billions of dollars in investment in British Columbia.”
Mr. Coleman noted that he met a few months ago in Victoria with Petronas’s CEO and comptroller to talk about the company’s interest in B.C.
“They told me they were bullish on British Columbia,” he said. “The big thing was also certainty. They wanted to know there would be some vehicle that said somebody is not going to change the rules of the game after they start to spend billions of dollars.
“We’ll do that because we’ll do the legislation on the tax piece.”
A number of other LNG projects are being proposed for B.C., but their proponents are awaiting details on the tax regime.