British Columbia creates tax credit to spur LNG development, CP Chem investigates NAO plant, US chemical activity up slightly in March
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British Columbia creates tax credit to spur LNG development
British Columbia (B.C.) is changing the province’s tax structure for liquefied natural gas (LNG) projects, aiming to encourage more development through a natural gas tax credit, the Canadian Press reported.
Finance Minister Carole James said the change was introduced in legislation and is meant to bring jobs and other financial benefits to the province.
The new tax credit would go in effect in January 2020, to companies that qualify for it. It would be calculated at 3% of the cost of natural gas and could be used to reduce B.C.’s corporate income tax rate from 12% to 9%.
In October, LNG Canada announced plans for a $40-billion project in Kitimat.
The government says the tax changes it is making will provide the fiscal framework needed for the project, which is expected to create 10,000 construction jobs and up to 950 permanent jobs in the processing terminal.
CP Chem investigating new 1-Hexene plant
Chevron Phillips Chemical Company is conducting a study to explore the creation of a new 1-Hexene unit to expand the production of normal alpha olefins (NAO).
The company has not disclosed the amount to be invested in the expansion.
NAO is used to produce polyethylene (PE), synthetic motor oils, lubricants, plasticizers, automotive additives, surfactants and other numerous specialty products.
“As global demand for polyethylene continues to grow, this study demonstrates Chevron Phillips Chemical’s commitment to expand with customer demand and remain a leading supplier of 1-Hexene,”
Chevron Phillips Chemical Company polymers and specialties senior vice-president Dave Morgan said in a statement.
The company currently operates two full-spectrum NAO production units and the world’s largest on-purpose 1-Hexene production plant at its Cedar Bayou site in Texas.
In March 2016, the company decided to expand its capacity to produce low-viscosity poly alpha olefins (PAO) at its Cedar Bayou plant.
In 2018, Chevron Phillips started up its new 1.5 million tonne/year ethane cracker at the same facility.
US chemical activity up slightly in March
U.S. chemical activity rebounded in March on a three-month-moving-average (3MMA) basis, the first gain in five months, the American Chemistry Council (ACC) said.
“The CAB continues to indicate gains in U.S. commercial and industrial activity through mid-2019, but at a markedly slower rate of growth, as measured by year-earlier comparisons,” said Kevin Swift, chief economist at the ACC.
Trends in construction-related resins, pigments and related performance chemistry were mixed and suggest further slowing in housing activity.
Plastic resins used in packaging and in consumer and institutional applications were slightly positive.
The CAB is a leading economic indicator derived from a composite index of chemical industry activity. It has four primary components including production, equity prices, product prices, as well as inventories and other indicators.