The Financial Post: Petronas pushing Ottawa for billions in LNG tax relief as export terminal decision looms

Malaysia’s Petroliam Nasional Bhd is seeking potentially billions in tax relief from the federal government in exchange for opening new markets for Canadian natural gas, as it inches closer to a final investment decision on a B.C. export terminal.

Former senior commander in Afghanistan oversees sweeping restructuring of Alberta’s energy regulatory regime. His mission: To restore credibility

A consortium led by state-run Petronas this week registered to meet with federal officials “regarding capital cost allowances in Budget 2015,” according to Canada’s lobbying registry.

The Malaysian company has proposed a $9-billion to $11-billion liquefied natural gas plant at Lelu Island on British Columbia’s northern shores, one of more than a dozen planned by major energy companies keen to transform the rugged coast into an export hub.

Chief executive Shamsul Azhar Abbas in May warned a provincial tax of up to 7% on export profits, after development costs are recouped, could jeopardize planned investments in the upstart sector. Now, with a final investment decision expected by year-end, the company is seeking tax concessions including a capital cost allowance of 30%, up from about 8% under current regulations.

The change could generate $75-million to $100-million in tax savings over a seven-year period on every billion dollars invested, according to estimates by Kin Lo, an associate professor at B.C.’s Sauder School of Business. MORE