For the second time this year, the Fee, Levy and Security Regulation, B.C. Reg. 8/2014, has been amended by the British Columbia Oil and Gas Commission (the "OGC"). The stated intention of the amendments is to make the fee structure "better reflect the complexities of consultation, advice and reviews required for major oil and gas projects". The OGC began consulting with industry on these amendments last fall.
The amendments can be grouped into two sets. The first concerns the fees related to Class C pipelines and LNG facilities. These are the largest projects of their kind, being pipelines with outside diameters of 609.6 mm or more and facilities with a capacity to process more than 5.6 million m3/day. The second concerns fees for other aspects of the operation of LNG facilities.
Previously, a basic fee of $370,000 was required on application for a permit for Class C pipelines more than 50 km in length and $650,000 was required on application for a permit to construct or operate a Class C LNG facility. Post-amendment, these have been split. The changes result in the permitting fees for major projects being divided into a "review and consultation" phase and a "permit application" phase. This division affects only the Class C facilities as these are the ones requiring lengthy pre-application work including environmental assessments. New section 4.1 requires payment of a $350,000 fee if the OGC provides advice and consultation services for at least three months respecting a Class C pipeline or LNG facility that requires an environmental assessment under the Environmental Assessment Act, S.B.C. 2002, c. 43. If this payment has been submitted, the base fee on an application for a Class C pipeline or LNG facility is reduced to $20,000 and $300,000, respectively.
The second set of amendments concerns fees for other aspects of the operation of LNG facilities. Specifically, the fees for major permit amendments for Class B and C LNG facilities have been standardized at $7,000 and $15,000 (from up to $50,000 and $350,000), respectively, and new fees have been added for the review of submissions made by an LNG facility permit holder under section 31 of the Oil and Gas Activities Act, S.B.C. 2008, c.36, (for a Class B LNG facility, $25,000; for a Class C LNG facility, $150,000) and for the review of submissions and test results under the Liquefied Natural Gas Facility Regulation, B.C. Reg. 146/2014 (for a Class B LNG facility, $25,000; for a Class C LNG facility, $100,000). These new fees apply to amendments incorporating completed engineering designs, so, as above, the net effect is less than the raw numbers suggest in isolation (Class B LNG facility, $57,000; Class C LNG facility, $265,000).
The full text of the amendments can be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.