Sunday, May 4, 2014

CNOOC and BG to join forces on LNG terminal development

An interesting story developed as we were away from our post that could herald yet another major step in LNG development on the North Coast, though possibly reducing the number of proposed terminals by one in the region.

An article in the Financial Post of April 23rd, highlights how the BG Group and CNOOC will be joining forces to develop an LNG terminal in Prince Rupert, bringing together two large energy companies to work on one terminal.

Both previously had announced separate terminal developments for the region, BG on Ridley Island, CNOOC the Chinese Energy giant had previously outlined its plan for development at Grassy Point.

Neither company was providing much information to the Financial Post on their plans, with no outline as to whether the jointly operated terminal would be located at Ridley Island or at the CNOOC site at Grassy Point.

That decision will be of some interest to the City of Prince Rupert, particularly when it comes to future budget planning.

Should the new partnership decide that the CNOOC site is a preferred option, the City would then be losing out on any industrial taxation that would be part of the Ridley Island development.

As the map for potential LNG development continues to evolve, the prospect of the City of Prince Rupert being left out of some direct monetary reward for all the proposed projects seems to be growing.

Of the four major proposals thus far, three are outside of the city's taxation reach, with only the BG Group's Ridley Island project within the city's current municipal boundary.

While Prince Rupert will benefit from the jobs that come from such projects and the boost to the population base. With the proposed developments slipping over the city's current borders, city officials could see the city having to host a growing population base, without direct access to the industrial taxation required to service the increased stresses on its infrastructure.

No timeline was provided to the Financial Post as to how the reported joint partnership was set to evolve.

You can review the article here.

For more on LNG development on the North Coast see our archive page

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