The Ministry of Finance has submitted a proposal for general amendments in the Petroleum Taxation Act. The proposal implies more favourable tax rules for gas-fields that require construction of a new large-scale LNG-facility.

According to the proposed tax rules, investment in production equipment and pipelines may be depreciated for tax purposes over a period of 3 years when the gas is used for LNG-production in a new large-scale LNG-facility. The general rule in the Petroleum Taxation Act is depreciation over a period of 6 years. The proposal also implies that the taxation of gains and losses are changed in accordance with the proposed amendments of the depreciation rates.

The proposed changes will apply to the Snøhvit-project in the Barents Sea. On behalf of the licensees, Statoil has recently put forward a plan for installation and operation of Snøhvit LNG. The plan is conditioned on changes in the Petroleum Taxation Act in accordance with the proposal now being submitted.