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A lit trademark sign beacons customers to the Highland Village Chevron gas station in Jackson, Miss., Thursday, Oct. 29, 2009. Chevron’s plans to develop a vast gas project in Kitimat, B.C., have just been dealt a blow. Apache Corp., the energy giant’s partner, said last week that it wants out.Rogelio V. Solis/The Associated Press

Chevron Corp. has welcomed the B.C. government's plan to lighten the tax load on liquefied natural gas projects as the U.S. energy giant seeks Asian customers for Canadian LNG.

There have been 18 B.C. LNG projects proposed so far, though industry observers say only four at most will come to fruition. The Chevron-led Kitimat LNG venture ranks among the top proposals with a strong chance of forging ahead on the West Coast, despite concerns about weak energy prices, industry analysts say.

B.C. Finance Minister Mike de Jong tabled a bill on Oct. 21 that would put an LNG income tax rate of 3.5 per cent on net income once LNG export terminals recover capital costs. The latest plan came after B.C. LNG players balked at the government's proposal in provincial budget last February to impose a tax rate of up to 7 per cent.

San Ramon, Calif.-based Chevron, which reported Friday that its third-quarter profit rose 13 per cent to $5.59-billion (U.S.), is welcoming the revised tax regime.

"I think that what we are satisfied with is that the British Columbia government is very attentive to the realities of the industry. They've listened to what we have said, they've listened to what the buyers have said, and I think they made some very good moves in terms of what reality is out there and what it takes to make these projects economic," said Jeff Shellebarger, president of Chevron North America Exploration and Production Co.

The Canadian units of Chevron and Houston-based Apache Corp. each own 50 per cent of Kitimat LNG, but Apache said in July that it will exit the joint venture.

"Apache has announced their intent to fully exit the project. We're still committed to this project," Mr. Shellebarger said during a conference call with industry analysts.

He cautioned that Chevron won't make a final investment decision until buyers have been secured to accept LNG deliveries from Kitimat in northwestern British Columbia. Chevron wants to sign up long-term Asian customers for at least 60 per cent of Kitimat LNG's production.

Scotia Capital Inc. expects that it could take until the fall of 2015 or beyond for Kitimat LNG to make a final investment decision.

"The possibility of further delays on the project appear heightened, in our view, until a new partner is secure," Scotia Capital said in a recent research report.

Chevron became a co-owner of Kitimat LNG in late 2012. Under previous owners, the venture formerly targeted starting production in 2015. The earliest time that Chevron could launch B.C. LNG exports will now be in 2020, industry experts say.

Mr. Shellebarger said Chevron is bullish on the shale gas play in the Liard and Horn River basins in northeastern British Columbia. "We think that the low-cost, potentially prolific reserves up in the Liard and Horn River are going to make an attractive LNG project in time," he said.

Chevron's other assets in its global portfolio include its 64.1-per-cent stake in Wheatstone LNG and 47.3-per-cent interest in Gorgon LNG in Australia.

Canadian LNG proponents warn that British Columbia trails rival projects in countries such as the United States and Australia.

"We continue to work with the government of British Columbia. We're encouraged by the recent news that has come out of there with respect to how they want to treat LNG in taxes," Mr. Shellebarger said.

The B.C. Liberals, who won the 2013 provincial election after Premier Christy Clark touted dreams of LNG riches, have vastly scaled back expectations for the fledgling B.C. LNG sector amid fierce global competition.

Last week, British energy firm BG Group PLC said its original target for a final investment decision in 2016 will be delayed for its Prince Rupert LNG project. Industry analysts say BG Group will likely wait until the fall of 2017 before deciding whether to press ahead.