Gas Reference Prices

In British Columbia, the Gas Reference Price is the price used to value the royalty or tax share for marketable gas. The Reference Price is also a factor in formulas that determine gas royalty rates.

The Reference Price is the greater of the Producer Price and the Posted Minimum Price (PMP). Both the Producer Price and the PMP are based on the current market prices.

Producer Price

The Producer Price is determined monthly for each producer at each gas processing plant at which the producer has production for the month. Producers are required to submit sales statements for all their sales of marketable gas in a given month. Based on these statements, an average sales price is determined for each producer at a specific point in British Columbia. This average price is then netted back to the plant inlet of each processing plant using their actual processing and transportation charges.

Posted Minimum Price

The PMP is determined at a gas processing plant or dry gas source and sets a minimum value for Reference Prices. The Ministry of Energy, Mines and Petroleum Resources calculates and publishes PMPs for five groupings of plants.

If the Producer Price for a producer at a plant is less than the PMP for the plant, the PMP must be used in the royalty calculation.

For more information, please see the British Columbia Oil and Gas Royalty Handbook, Section 5.3 or contact Kathy Otton at 250-952-0230 or by e-mail at kathy.otton@gov.bc.ca.