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Australia: Tax proposals put CBM timetable in doubt

A proposed new tax on onshore natural-resources production threatens to increase overall costs for the CBM sector, potentially putting it at a disadvantage compared with offshore conventional gas production

JUST AS coal-bed methane (CBM) projects were threatening to make inroads into the liquefied natural gas (LNG) export market, the Australian government has thrown a spanner in the works. The proposed Resource Super Profits Tax (RSPT) covers onshore mining activities, including CBM, but does not affect most of the offshore gas industry, which is covered by a different regime, the Petroleum Resource Rent Tax (PRRT). The latter covers most offshore projects, although not the North West Shelf region, and it remains unclear how that will be taxed. The tax could set back the timetable for some of the recent spate of proposed onshore CBM-LNG projects, as they weigh up the possible impact. Five CBM

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