Liquefaction Activities

You pay LNG income tax on income from liquefaction activities at an LNG facility.

Liquefaction activities include:

  • Subject to some exceptions, acquiring, owning or disposing of:
    • liquefied natural gas, natural gas liquids or natural gas that is at an LNG facility
    • the right to acquire, own or dispose of these commodities that are at an LNG facility
  • Acquiring, owning or disposing of all or part of an LNG facility or a right to use all or part of an LNG facility
  • Operating all or part of an LNG facility
  • Disposing of electrical power by an owner or operator of the LNG facility, if the electrical power is generated at their LNG facility
  • Acquiring, owning or disposing of intangible personal property, such as permits, licenses or intellectual property, by an owner or operator, if the property is used to operate their LNG facility or engage in the liquefaction activities described above
  • Acquiring, owning or disposing of a right to receive income from the liquefaction activities described above
  • Activities that support the LNG plant, such as construction, administration and maintenance, if you are carrying out any of the liquefaction activities described above
  • Restoring, reclaiming or remediating an LNG facility site

Liquefaction activities don’t include:

  • Acquiring, owning or disposing of natural gas or the right to do so before the natural gas passes through the LNG facility inlet meter
  • Disposing of natural gas or disposing of the right to do so when the natural gas passes through an LNG facility inlet meter
  • Acquiring natural gas, natural gas liquids or liquefied natural gas or acquiring the right to do so when these commodities leave the LNG plant that is part of the LNG facility
  • Acquiring, owning or disposing of natural gas, natural gas liquids or liquefied natural gas or the right to do so after these commodities have left the LNG plant that is part of the LNG facility

LNG income tax applies to income from liquefaction activities on a facility by facility basis. In B.C., income from liquefaction activities is generally taxed from the point when the natural gas arrives at an LNG facility inlet meter to when the LNG leaves the LNG plant. The LNG plant can include property used for the following:

  • acid gas removal
  • dehydration
  • mercury removal
  • natural gas liquids removal
  • natural gas liquids storage
  • refrigeration
  • LNG storage
  • loading facilities