-- Canadian provincial government of British Columbia is working on revised royalties for natural gas extraction with proposals that have caused disquiet in the sector, potentially jeopardizing new investments, Bloomberg reported on Friday.
Businesses were unnerved about a month ago when a government presentation suggest producers would pay a higher royalty that would be activated if prices rose to a certain level, people familiar with the matter who did not wish to be identified due to the confidentiality of the matter told Bloomberg.
The revision took companies by surprise, given that the oil and gas royalty system has already been under review for a few years and because of the fact that companies have already confirmed drilling plans for the next 12 months.
British Columbia's Ministry of Energy said in an emailed statement to Bloomberg that the revisions were almost complete and would enter into force on Jan. 1.has contacted the Ministry seeking comment.
Canadian Prime Minister Mark Carney has encouraged new liquefied natural gas projects as part of reforms to the economy, the article said.
While all of Canada's gas exports went to the US in 2023, the country began shipping LNG to Asia in 2025, diversifying away from the US after President Donald Trump's threats of tariff impositions.
The CEO of the Calgary Chamber of Commerce, CEO Deborah Yedlin, wrote in a newspaper opinion piece recently that the province had embarked on a "royalty grab" that could jeopardize planned LNG projects near to final investment decision, the Bloomberg article said.
It noted that discussions between British Columbia government representatives and energy companies have eased some of the latter's concerns, but not all of them.
One LNG project planned, but not yet in existence, and which could be affected by royalty changes, is LNG Canada's second phase which would double its capacity to about 28 million metric tons per year. LNG Canada is backed by Shell (SHEL) and others.
British Columbia's Energy Ministry said any new system would be more transparent and in keeping with today's market dynamics and strike a balance between the success of business and the province.
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