20-Year Tax Agreement for Terminal in Richmond County

SERVICE N.S./MUNICIPAL RELATIONS--20-Year Tax Agreement for Terminal in Richmond County

The Municipality of the County of Richmond will collect at least $3 million per year in municipal taxes once the Bear Head liquefied natural gas (LNG) terminal proposed for Point Tupper is operational in late 2007.

The 20-year agreement, announced today, Sept. 20, by the Municipality of the County of Richmond and Anadarko -- the company building the plant -- allows the municipality to collect taxes based on the estimated cost to construct the Bear Head LNG Terminal. Taxes may increase if the actual costs are higher than estimated.

"A very tangible benefit of new industrial development in Richmond County is the contribution to the county's tax base, which allows the municipality to plan and invest for the long- term," said Gail Johnson, warden of Richmond County.

Under the provisions of Bill-74, The Oil Refineries and LNG Plants Municipal Taxation Act, the province can set the level of municipal taxation to be paid by a refinery or LNG plant after consultation with the affected municipal unit.

"The Municipality of the County of Richmond and Anadarko have agreed upon a fair level of taxes," said Barry Barnet, Minister of Service Nova Scotia and Municipal Relations. "This co- operation between municipal units and the private sector is what the legislation envisioned, so the province is happy to act on the joint request to set the taxes under regulation."

The agreement stipulates that after the first year of operations, the taxes will be indexed to the Consumer Price Index (CPI). The initial term of the agreement is 20 years with an option for the company to renew for a subsequent term of five years.

"Anadarko is committing to paying fair taxes and to being an active contributor to the community. We entered into the agreement with the municipality in the spirit of ensuring that our obligations are met and that we are transparent with the community," said Randy Kopjar, vice-president, gas commercialization, Anadarko Canada Corporation.

Any future arrangements such as plant expansions and additions would require a separate agreement.