British Columbia sees $7.1 billion from Petronas gas exports

REBECCA PENTY

CALGARY, Alberta (Bloomberg) -- British Columbia is pledging to cap levies on Petroliam Nasional Bhd.’s gas export project as it expects to collect C$9 billion ($7.1 billion) from the venture by 2030.

Canada’s westernmost province must compensate the Malaysian oil producer, known as Petronas, and its partners if it adds costs through changes to certain taxes or credits over the next 25 years, according to terms of an agreement signed May 20 that were released on Monday.

“The revenue opportunities are significant,” British Columbia Finance Minister Michael de Jong said in a briefing with reporters on Monday.

Petronas and its partners said last month that they will conditionally move ahead with the C$36-billion export terminal, among 19 proposed in British Columbia to ship LNG to Asia. The agreement must be approved by the provincial legislature.

Groups including the Pembina Institute, an environmental organization, have criticized the potential costs of the provincial government’s guarantees to Petronas.

The government’s take is based on assumptions including a premium of $7 per million British thermal unit for LNG sold from Canada’s Pacific Coast over the Henry Hub U.S. benchmark gas price.