Impasse deepens over B.C. LNG tax as Shell warns 7% levy not globally competitive

Financial Post | Business

Royal Dutch Shell Plc is leading an industry pushback against the scope of British Columbia’s proposed tax on liquefied natural gas exports, extending a standoff over fiscal terms for the upstart sector.

The B.C government this week announced a two-tier tax structure for the industry as part of the provincial budget. Under the scheme, profits from LNG plants will be taxed at an initial rate of 1.2%, with rates climbing as high as 7% once companies recover capital costs associated with building the multibillion-dollar export terminals.

The B.C. government said the rates are competitive with rival export jurisdictions in Australia and five U.S. states, including Alaska, Texas and Louisiana.

We’ve been clear that the rate needs to be globally competitive if B.C. is to build an LNG industry

But Shell on Wednesday questioned that assessment, deepening an impasse that has delayed final investment decisions and threatened to snuff out a…

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