BC Government Releases Update to Liquefied Natural Gas Strategy
In its recent throne speech, the BC government predicted that the LNG industry could add $1 trillion to the provincial GDP over the next 30 years. The Province intends to launch a new “Prosperity Fund” that would accumulate over $100 billion in LNG royalties during this timeframe. Such funds would be used to pay down the $56 billion in provincial debt, and perhaps eliminate the provincial sales tax and invest in education, social services and infrastructure.
The BC government also released a one-year update to its 2012 LNG strategy in the days preceding the throne speech. According to the update, the goal of having three LNG facilities operational by 2020 set out in The BC Jobs Plan is on track and suggests that the province could surpass this target.
According to the update, since the LNG strategy was released in February 2012, Premier Clark made two trade missions to Asia to promote the BC LNG sector to prospective customers. The past year saw over $6 billion in investment into upstream natural gas assets and strategic corporate acquisitions, and another $1 billion was spent to prepare for the construction of LNG-related infrastructure.
The update highlights five proposed LNG projects, as well as other notable industry players that are actively exploring the potential to launch projects of their own. To further focus the industry’s attention on British Columbia, the government will host Canada’s first international LNG conference in Vancouver on February 25-26, 2013. Recognizing the need to prepare for the pressures that the new LNG industry will bring, the BC government has also launched a labour market partnership to ensure that appropriate expertise will be available as needed.
The government continues its discussions with the LNG industry about power supply requirements. The Province reiterated its focus on having the cleanest LNG industry in the world, but acknowledges that flexibility is required to address commercial concerns of LNG proponents. Power supply arrangements are expected to be resolved in advance of BC Hydro’s submission of its Integrated Resource Plan (currently due in August 2013).
In an effort to address potential ratepayer concerns, the government confirmed that, to the extent that LNG facilities will connect to the BC Hydro grid, LNG proponents will be required to contribute capital for any new power infrastructure built. Residential, commercial and other industrial ratepayers are not expected to finance any costs related to supplying power for LNG projects.
BC Hydro Christy Clark Integrated Resource Plan liquefied natural gas LNG Prosperity Fund ratepayer The BC Jobs Plan