The Impact of Government Requirements and Fiscal Terms on the State’s Revenue from a Liquefied Natural Gas Plant

Abstract

World natural gas consumption is expected to increase from 270 BCFD to 450 BCFD between 2004 and 2030. In response to this, the LNG business in the Atlantic basin is projected to have a sustained annual growth rate of 7% over the next two decades. LNG projects require the investment of large sums of money and government sanction and support for these projects is often necessary for their success. In exchange for their sanction, governments impose requirements and fiscal terms on LNG projects so that their countries can gain benefits from the projects and share in the economic value generated by the projects. This thesis investigates how the requirements which a government might impose on an LNG project impact the state revenue from the project.