VANCOUVER (Reuters) - British Columbia, eager to capitalize on a potential boom in natural gas investment, expects to announce a export tax regime for the nascent industry next month, a senior provincial government official said on Monday.
Rich Coleman, the Canadian province’s minister of energy and mines, told reporters that the government is negotiating with the companies that are planning to build liquefied natural gas (LNG) infrastructure, aiming to find a balance between costs and local benefits.
“We’re very close to that sweet spot and we’re very close to having a situation where we can announce what it is,” Coleman said of the export tax plan. “We think that will come sometime in November.”
Coleman added that the West Coast province’s ruling Liberal government will look to secure any new export tax regime through legislation, in an effort to create more certainty for potential investors.
“Once we get to that competitive regime, we’re going to lock it down ... so that somebody else can’t come in and arbitrarily change things after you’ve made billions of dollars of investment,” he said.
On Sunday, Malaysia’s prime minister touted a potential $35 billion investment by state oil firm Petronas PETR.UL to develop shale gas assets in Canada and build an LNG terminal that would link British Columbia to energy-hungry Asian markets.
A final investment decision on that project is expected in 2014.
There are numerous other LNG projects in the planning stage. British Columbia’s government is targeting at least three operational LNG terminals by 2020 as it looks to natural gas to transform the local economy.
But the province faces stiff competition from other jurisdictions around the world, including the United States and Australia, which are also developing natural gas infrastructure and are moving quickly to secure deals.
Coleman will leave later this week for a week-long trip to South Korea, China and Malaysia to meet with companies that are moving forward with LNG projects in the province.
Reporting by Julie Gordon; Editing by Jeffrey Hodgson and Eric Walsh