Michael de Jong heads to Malaysia to try and close LNG deal
B.C Minister of Finance to shore up project with Petronas after passing new act
B.C. Finance Minister Michael de Jong is on his way to Malaysia after a busy week in the province's legislature that saw two significant developments which could help bring a $36 billion liquefied natural gas project to B.C.
Historic day for BCians – Gov't has passed legislation that sets the stage for extraordinary LNG opportunity. <a href="https://twitter.com/hashtag/BCpoli?src=hash">#BCpoli</a> <a href="http://t.co/NQh2wgIl8d">http://t.co/NQh2wgIl8d</a>—@christyclarkbc
The opposition NDP did not support the bill as they have long argued the project does not guarantee jobs for B.C. and gives up future tax revenues.
The government needed legislative approval to enter into an agreement with Pacific NorthWest LNG, a consortium led by Malaysian energy giant Petronas.
The company plans to build an LNG export terminal near Prince Rupert.
Under the terms of the agreement, B.C. would compensate the consortium if future governments:
- Raise income rates for LNG operations.
- Add carbon taxes that specifically target the industry.
- Reduce natural gas tax credits.
- Make changes to rules on greenhouse emissions that financially harm the industry.
The project is expected to result in about 4,500 jobs at peak construction and generate nearly $9 billion in taxes and royalties by 2030.
"Now that the province has met its obligations, we are an important step closer to the company's final investment decision and the start of an LNG industry in B.C.," said de Jong in a statement.
"We will keep moving forward to make this incredible opportunity a reality so we can build our economic portfolio, and create jobs and opportunities for British Columbians now and in the future."
De Jong will meet with officials in Malaysia for the next six days to discuss the ratification of the project.
The province estimates that travel and accommodation costs for the minister and his chief of staff are approximately $7,900.