LNG companies slugged with huge rates increase
GLADSTONE'S LNG companies will be slugged massive increases in the amount of rates they pay the Gladstone Regional Council once their production trains start exporting liquefied natural gas.
Two new rating differential categories have been added to the council's rating list this year especially to cater for the LNG industry.
One rate, 77.490 cents in the dollar of land valuation, will apply to plants operating one production train and the other, 154.980 cents in the dollar, for those with two operational production trains.
All three LNG plants will have two trains when completed.
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Currently the QCLNG plant is the only producing facility, while the others are either still in construction or in the commissioning phase.
During the construction phase of the projects, the gas companies have been paying 66.083 cents in the dollar.
Council chief financial officer Mark Holmes said the new rate levels wouldn't apply until the plants were producing and exporting LNG.
The rate increase will be capped so the companies will pay no more than a 50% increase in the previous year's rates, which means it could take some years before the total impact of the rating change will be felt.
Mr Holmes said the changes were an attempt to create a fair and equitable rating system across all ratepayers.
"For example, our residential ratepayers are currently paying what we have estimated to be 1.48% of their income. Our major industries at present are paying about 1.13% and the LNG companies are paying well below that level.
"We want to see fairness across the board. It's a process we started in 2012 and it will take some years before it is finally implemented across all categories.
"We have done our best so far to attempt to achieve that," he said.
Mr Holmes said the council had met with the three LNG companies and explained its position.
"The meeting was a fairly agreeable one, and while the gas companies may not be impressed with what we are trying to achieve, they seemed to understand the reasoning behind it."
He said as production came online at the three plants, he would expect the land valuations set by the state government to also rise, and the rating levels may indeed drop at that time.
The Observer has contacted all three LNG companies seeking reaction to the rating changes.
A spokesperson for APLNG said it was too early to comment on the changes. No responses had been received at the time of going to press from QCLNG or Santos GLNG.