Canadian Manufacturing

Pacific NorthWest LNG signs property tax deal with B.C. town

25-year deal guarantees District of Port Edward $3.25 million annually should construction of project proceed



PORT EDWARD, B.C.—A Petronas-backed liquefied natural gas (LNG) project in British Columbia may be down but it’s certainly not out, with management announcing it has worked out a property tax deal with a local municipality south of Prince Rupert, B.C.

Pacific NorthWest LNG Ltd., the proposed project, backed by Malaysian state-owned Petronas, as well as Japan Petroleum Exploration Co., Ltd., China Petrochemical Corp., Indian Oil Corp., Ltd. and Brunei National Petroleum Co., signed the 25-year agreement-in-principle that guarantees the District of Port Edward $3.25 million annually, escalating over the life of the deal, in property taxes.

“Pacific NorthWest LNG intends on being a long-term positive contributor to the District of Port Edward and this agreement-in-principle serves as the blueprint for a multi-decade co-operative relationship that will benefit all residents of Port Edward,” Michael Culbert, president of Pacific NorthWest, said in a statement.

The agreement, which is subject to construction of the project proceeding, was signed just days after Petronas announced it was delaying the project due to sliding oil prices.

Still, Port Edward mayor Dave MacDonald lauded the agreement, claiming the project will provide an opportunity to draw former residents back to the municipality of some 600 people.

“Liquefied natural gas, and Pacific NorthWest LNG in particular, represents the chance to bring our children who have gone elsewhere in search of opportunity back home to Port Edward,” MacDonald said. “The bold agreement with Pacific NorthWest LNG was reached on our terms and will ensure that Port Edward residents benefit from the LNG opportunity in the form of increased services, as well as infrastructure upgrades and ultimately, improved quality of life.”

The project, which has been the subject of much public sparring between Petronas and the B.C. government, will see the Malaysian firm invest about $36 billion, which covers construction of the LNG plant, shale gas fields in northeastern B.C., and a pipeline to connect the two.

For its part, the province has dealt with a number of policy matters standing in the way of the project, including establishing an LNG tax regime, working to gain support of area First Nations, and tabling emissions regulations for the industry.

B.C. Premier Christy Clark has said her government is looking for at least three LNG export plants to be operating in the province by 2020.

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