Whether Canada becomes a competitor
“We needed to make some adjustments,” BC finance minister Michael de Jong said in an interview after releasing details of the framework, which must be approved by provincial lawmakers before it can go into effect. “(LNG) supply is increasing on a worldwide basis.”
The lower tax rate – and how LNG proponents appraise it – will be key in determining whether Canada becomes a competitor to the US, Australia, Qatar and other jurisdictions looking to supply Asian buyers with the liquefied form of natural gas. There are 13 proposed LNG plants on Canada’s west coast to export gas to Asia, including projects led by ExxonMobil and Chevron.
LNG export terminals in BC would be well positioned to supply east Asia, which accounts for most global LNG demand growth. China, for example, is trying to push its utilities and manufacturers to switch to natural gas, which burns more cleanly than oil or coal, as a power source.
“China has recently emerged as a net importer of natural gas,” the Canadian Association of Petroleum Producers noted in a January 2014 report. “With its almost insatiable demand for energy, it is expected to become a major importer of LNG.”