Sunday, January 31, 2016

LNG in British Columbia, Here Comes the Tax Evaders-Petronas-Chevron-Shell Canada-Steelhead-AltaGas

Assembled by Grant G

With Paul Godfrey's Postmedia newspaper business in total disarray....With Postmedia investigative journalism listed as an endangered species(I believe Postmedia investigative journalism is actually already extinct, no sightings reported in five years)....Postmedia is a mere corporate soapbox disguised as print media....

Further down Below this posting is some LNG project information posted in The Financial Post...The article below appeared a couple of months ago(November 2nd 2015)......Why am I posting the below information? There is a simple answer....and it has to do with our domestic legislative scribers/media...And it also has to do with British Columbia' s current loyal opposition party, that being John Horgan's BC NDP ...

Christy Clark...and natural gas minister Rich Coleman made the outrageous claim that three LNG terminals would create 100,000 LNG jobs....Here are direct quotes Rich Coleman made on February 22/2014......

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LNG minister laughs at the skeptics

"I get a kick out of some of the other folks out there saying: 'You're behind schedule.' "No we're not. We're actually right on the time frame that I established."

One thing that works in the government's favour is the scale of the enterprise. The values are so vast that even delivering a fraction of the potential could count as a win.

Coleman said: "They say: 'They can't all go ahead.' "I say: 'OK. Let's have three LNG terminals.' That's $100 billion. That's 100,000 jobs."

It's that comfort level that's giving him the kicks, and the amusement. snip..

http://www.canada.com/victoriatimescolonist/news/comment/story.html?id=9cc9a3fd-2f0b-4b77-b2e1-40ddae5a1039&k=33176

Three LNG terminals....100,000 jobs....Really Rich Coleman....?

The Financial Post is not a British Columbia oriented newspaper, it`s a corporate newspaper, however, the LNG projects mentioned in the below Financial Post article are proposed British Columbia projects, so, in light of Rich Coleman and Christy Clark's LNG job claims one would think that The Province Newspaper..The Vancouver Sun..Global BC..CKNW....Keith Baldrey..Michael Smyth..Vaughn Palmer...Les Leyne...Tom Fletcher...BC's legislative reporters would have jumped all over the below information.....But all we heard from those deaf, blind and dumb reporters was silence...Not a single word from any of the above mentioned news outlets(?)..

Read the below paragraphs....

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Steelhead LNG is widely considered a dark horse in the race to build export projects on the West Coast, but despite substantial challenges, a number of analysts note the company is rapidly making progress and has begun wooing potential customers in Asia. Kuzemko was in Singapore last week........

The company, however, does not have a cost estimate for the Malahat LNG facility, which would process 900 million cubic feet of natural gas from northern B.C. per day......

Asked how Steelhead LNG would keep a lid on its costs, Kuzemko said the Malahat LNG project is designed as a floating LNG (or FLNG) facility that would be built in Asia at a lower cost and floated across the Pacific to its destination on Vancouver Island..

“Near-shore FLNG is becoming much more competitive,” Munton said. “You are starting to see the concept and the technology take hold.”........

http://business.financialpost.com/news/energy/steelhead-lng-vs-the-salish-sea-underwater-pipeline-must-be-negotiated-before-financing-can-be-secured?__lsa=7fc2-1733____

Ok.....Steelhead LNG has clearly stated that their proposed floating facility would be built entirely in Asia and barged to BC and hooked up to an existing pipeline in Washington state...Meaning the project would employ almost no one...All they require is 70 miles of pipeline to be built(40 miles of pipeline on the bottom of the Salish Sea(Georgia straight)....Seabed pipelines are laid down by a specialized ship...

What do you have to say Rich Coleman...30,000 jobs laying that pipe?...How many workers can fit on that ship....Oh, and as for the actual pipe...That too is coming from China,,..

The mainstream media reporting on LNG in the province of British Columbia is pathetic and sad...and it`s not that those reporters and columnists are stupid it`s because their corporate bosses at Postmedia forbade any domestic investigative journalism related to LNG and in particular to the LNG promises made by Christy Clark's BC Liberals...Postmedia writers do but one thing on LNG...They quote LNG industry pimps and quote BC Liberal spindoctors...

If it wasn't so tragic one could almost laugh....The scale of Christy Clark and Rich Coleman's lies are boundless...

What is even more amusing is...The Straight Goods reported on the new big thing in LNG on May 24th/2015 with this posting...

The Beginning of The end for Behemoth Land-Based LNG Export Plants(Petronas`s Achilles Heel, Finding Profit)

http://powellriverpersuader.blogspot.ca/2015/05/the-beginning-of-end-of-behemoth-land.html

That article explained how the next wave of LNG liquefaction facilities will be floating, versatile, mobile and ....And built in Asia and barged into place...Thus creating almost no employment, merely temporary pipeline work.....And, you`ll love this...

AltaGas...From the same Financial Post article...AltaGas has a floating LNG liquefaction proposal for British Columbia too(Douglas Channel LNG... in Kitimat)

But get this...AltaGas, their floating facility will be made in China too...and, there is an existing LNG pipeline already there, no need to even build a pipeline....How many jobs will that project create Christy Clark?...30,000??? 20,000?....How about thirty jobs!

Another totally foreign built LNG facility being barged to British Columbia..

Need another laugh...There are import taxes/fees owed to Canada on bringing in a foreign built floating LNG liquefaction facility...And you guessed it..Altagas refuses to pay the tax,,Here are two sources confirming just that...Here is the quote from
David Harris, AltaGas Ltd. - President (dated October 29th/2015)

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"We continue to work with our partners at the DCL consortium to progress our LNG export plans pending resolution of the import duty on the barge."

http://finance.yahoo.com/news/edited-transcript-ala-earnings-conference-031726485.html

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And double confirmed in the below Financial Post article dated November 2/2015

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On an earnings call last Thursday, management at Calgary-based AltaGas Ltd. — another FLNG project proponent — said they expect a decision in November(2015) on how their company’s Chinese-built floating project would be taxed when it’s imported into Canada.

That project, called Douglas Channel LNG, is widely considered one of the first projects likely to be built on the West Coast and is also tapping into an existing natural gas distribution system
http://business.financialpost.com/news/energy/steelhead-lng-vs-the-salish-sea-underwater-pipeline-must-be-negotiated-before-financing-can-be-secured?__lsa=7fc2-1733
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How many jobs will the Douglas Channel 100% foreign built and barged to British Columbia create Rich Coleman?...30,000 jobs, 20,000 jobs?.....How about 30...

But those are small facilities, what about Petronas's Pacific North West LNG proposal...Our domestic media keep using the $dollar figure $36 billion for that project...Yet everyone knows the estimated cost for that proposal is $11.4 billion....Surely that project will be built in British Columbia if it goes ahead with a positive FID...No, it will not be built in British Columbia either....And our domestic media...Vaughn Palmer..Les Leyne..Michael Smyth..Tom Fletcher, every single British Columbia legislative reporters and columnists and all of Post Media's newspapers know that too..

Yet they don`t report it...They cling to a fictional $36 billion dollar number and nary report that the entire facility will be manufactured in Asia...

Only one writer ever told the truth about Petronas's PNW LNG project....
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Petronas wants engineering work for B.C. LNG venture to be shifted offshore

BRENT JANG

VANCOUVER — The Globe and Mail

Published Thursday, Dec. 04 2014, 5:49 PM EST
Last updated Thursday, Dec. 04 2014, 6:11 PM EST

Petronas plans to push contractors to shift more engineering work for a proposed B.C. liquefied natural gas venture to lower-cost centres offshore as the Malaysian energy giant squeezes suppliers.

Of the total $11.4-billion in estimated construction costs for the Petronas-led Pacific NorthWest LNG export terminal at Lelu Island, there would be $8-billion worth of imported goods and services spread over a five-year period.

It is in that international component where Petronas hopes to find the bulk of cost savings

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/petronas-pushes-offshore-work-for-british-columbia-lng-venture/article21960284/

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$8 billion dollars worth of modules and mainframes on a $11.4 billion dollar project all being imported into British Columbia from Asia,,,

And guess what....Petronas is asking to have all import taxes waived goodbye...As in Petronas is refusing to pay...

And I guarantee this...If and when Petronas is granted their import tax waiver...That $8 billion dollars worth of imported modules and mainframes will suddenly balloon in cost to $20 billion dollars worth of imported mainframes and modules....And you guessed it, as reported near exclusively by The Straight Goods....All those Australian LNG plants that went over budget by 50%...80% or in the case of Chevron's Gorgon Plant..100%....There is a deliberate game of political bribes and inflated build costs with the energy giants getting kickback money....Why would they do that you ask?...

Because these energy giants can write off their build costs,....meaning the taxpayer pays double the money back to the company...

Christy Clark`s LNG Fantasy Reality Check

http://powellriverpersuader.blogspot.ca/2013/05/christy-clarks-lng-fantasy-reality-check.html

Are you ready for this shocker????..This is what's coming to British Columbia through the LNG energy fraudsters...The BC Liberals enshrined this scam into law,,

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Chevron paid only $248 tax on $1.7b profit, Senate tax inquiry told

Chevron Australia's US parent company paid income tax of only $248 last year despite earning an estimated $1.73 billion profit on interest charges to its Gorgon LNG development, documents filed with the Senate inquiry into corporate tax avoidance show.

Chevron Australia Petroleum Company, incorporated in Delaware, charged its subsidiary Chevron Australia $1.8 billion in 2014, more than 25 times the interest cost it pays to external lenders, on $36.5 billion of debt.

None of this profit appears to have been taxable in the US, with Chevron APC paying less than $US200 a year tax for the last decade, documents submitted to the tax inquiry by the International Transport Workers' Federation (ITF) show.

Chevron Australia has confirmed the Australian Tax Office is auditing its funding arrangements on the $US54 billion ($76 billion) Greater Gorgon LNG development, after the Federal Court last month confirmed penalty assessments on an earlier tax-free funding scheme by the group.

Read more: http://www.afr.com/business/energy/gas/chevron-gorgon-company-paid-only-248-tax-on-17-bn-profit-senate-tax-inquiry-told-20151108-gktu7s#ixzz3yoJ92B87

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Need more...It's not just Chevron....

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Chevron, ExxonMobil & Shell and the $3 billion Gorgon tax two-step

Chevron, ExxonMobil and Shell are headed for a showdown with the Tax Office over tax-free profits of up to $3 billion a year.

Chevron, ExxonMobil and Shell are facing a showdown with the Tax Office over tax-free profits of up to $3 billion a year they are making from the huge Gorgon project, even before they have shipped the first gas.
The key to understanding this ongoing battle over the $US54 billion ($73 billion) project lies in its long and colourful history. Its origins date back 14 years, when Chevron Corporation announced a takeover of rival Texaco.
In any corporate mega-deal, behind the billion-dollar headlines and bullish forecasts from the chief executive, the mergers and acquisition team is busy working out just how much tax the new, bigger company is going to save.
So it was only a matter of time before the Chevron finance team implementing the $US45 billion Texaco takeover turned its mind to the Australian earnings......

Chevron and Texaco's Australian arms would be merged into a single holding company. This was an opportunity to introduce a little more debt, Chevron execs noted in office memos. It would reduce Chevron Australia's taxable income.

Ongoing confrontation

What followed has set the stage for the ongoing confrontation between the Tax Office and one of the world's largest LNG projects, developed by Chevron (47.3 per cent), ExxonMobil (25 per cent) and Shell (25 per cent).

Back then, the result of all the office memos was that in mid-2003, Chevron Australia set up a subsidiary in the US called Chevron Finance Corporation (CFC). Within weeks, CFC had raised $US2.45 billion from issuing commercial paper, with an interest rate set at or below the London Interbank Offer Rate (known as Libor) for the US dollar.

Over the next five years, that would work out as an average annual interest rate of 1.2 per cent.

CFC immediately on-loaned the $US2.45 billion ($A3.7 billion) to its parent, Chevron Australia, but not on the same terms. The new interest rate would be based instead on the Australian-dollar Libor rate, which was around 5 per cent.

More mark-ups

If that mark-up was not enough, CFC imposed a further mark-up of 4.14 per cent on top of this. The result was that in the next four years Chevron Australia was paying its subsidiary interest of between 8.8 per cent and 10.5 per cent.

For CFC, the profit this produced was a form of arbitrage, and it proved a nice little earner. And there was a pleasing twist.
For US tax purposes, CFC was owned by Chevron Australia, so it was a foreign company that didn't pay US tax.

Chevron Australia paid the interest to CFC, which paid out the 1.2 per cent due to the banks, and the rest was profit. CFC shipped this profit straight back to Chevron Australia as dividends – which in Australia were US earnings, so the profit was not taxable here either.

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But...Surely Petronas wouldn`t bribe public officials and inflate LNG build costs?

Actually yes...Price rigging, over-billing, inflated build costs, and bribing politicians is rampant among the big energy majors.

Tax avoidance is the name of the game with these companies...And we wonder why Alberta is broke?

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SBM Offshore settles with Brazilian court in Petrobras scandal

In December, Chabas and Hepkema appeared on a list of former Petrobras executives, sales agents and SBM Offshore executives who may be prosecuted in Brazil in relation to the scandal, in which executives from the Brazilian state energy company received bribes in exchange for work contracts.

State prosecutors say that, from 2004, certain Petrobras officials colluded with a cartel of companies to overcharge the oil company for construction and service work. Petrobras’ confederates were rewarded with bribes, much of which was allegedly shared with Brazilian politicians.

http://splash247.com/sbm-offshore-settles-with-brazilian-court-in-petronas-scandal/