NEWS RELEASE · 31st August 2010
M. of Energy, Mines & Petrol
The Province has awarded $115.6 million in royalty credits under the Infrastructure Royalty Credit Program to 16 companies for 21 natural gas and petroleum infrastructure projects, announced Bill Bennett, Minister of Energy, Mines and Petroleum Resources.
"Today we are leveraging strong investor confidence in our natural gas and petroleum sector to develop new infrastructure for the benefit of all British Columbians," said Bennett. "This program is directly responsible for bringing new investment, new jobs, and additional revenues to help fund education and health care."
The 21 new road and pipeline projects will support natural gas and petroleum exploration and development activity, and improve access to underdeveloped areas in northeast British Columbia. These projects will bring new economic opportunities and jobs to the region.
In addition, new production will generate additional royalty revenue to the Province. Historically, the Infrastructure Royalty Credit Program generates about $2.50 in incremental royalties for every dollar awarded in royalty credits.
Projects were awarded credits under the Infrastructure Royalty Credit Program following a Request for Applications and careful evaluation of each project's economic benefits to British Columbia. As in previous years, industry response to the Request for Applications was very strong, with applications for 47 projects involving a total request of approximately $706.4 million in estimated construction costs.
The program provides natural gas and petroleum companies with royalty deductions in exchange for industry investment in road and pipeline infrastructure. Companies are required to fund the entire cost of an approved infrastructure project, and may receive up to 50 per cent of the eligible project costs from the Province paid in the form of royalty deduction once the project is completed.
Since 2004, the program has allocated more than $485 million in infrastructure royalty credits, resulting in 71 new road-based projects and 83 new pipeline projects.
British Columbia continues to work in partnership with industry to create a vibrant, competitive natural gas and petroleum sector. The Infrastructure Royalty Credit Program delivers on the BC Energy Plan commitment to enhance infrastructure and improve access to resources.