Second of three LNG companies launches council court action

WIDESPREAD rage over their rates didn't appear to sway the council to review its finances and it seems neither will court action filed by two mega gas companies.

APLNG is the second of the three LNG companies to start legal action against the council over rates increases.

Two new rating categories introduced in this year's budget will see the LNG giants paying more than twice what they are now and contributing $10 million to council's budget each year, despite not using council services.

APLNG are calling for an independent review into the process the council used to determine what it described as "illegal" and "unreasonable" rate rises.

But it's a process the council CEO Stuart Randle says his team is ready to put to the test.

QCLNG started legal action against the council in August.

Each plant is facing an annual bill of at least $2.6 million for the use of land they say has little impact on the council's budget.

Like QCLNG, APLNG are calling for the court to overturn the rating decision and for the council to cover all their legal costs.

In documents we obtained from the Brisbane Supreme Court, APLNG said the rates increase is more than 13 times greater than increases that have been applied to other major industries.

APLNG says the council is wrong to decide rates based on "assumed or assessed gross operating surplus", and that the land being rated is a "limited burden" on the council's budget because it doesn't benefit from any services or facilities.

We understand both companies are still trying to negotiate outside court, because the council is yet to see either of the documents.

However council CEO Stuart Randle is happy to see it end up in court.

Gladstone Regional Council CEO Stuart Randle.
Gladstone Regional Council CEO Stuart Randle.


He says the council's decision is legal and made on the advice of experts.

Mr Randle said the rates weren't based on profitability but reflected the same rates structure used across the region where each household pays about 2% of their annual income.

"A judicial review will put this issue to bed once and for all so we welcome it," Mr Randle said.

In a written statement, APLNG told The Observer it supported the payment of council rates "based on the full and fair" requirements under the law.

The company's argument is similar to that put forward by QCLNG which says the council took into account "irrelevant" considerations when approving the rates increases, including the company's profits which they say don't reflect the characteristics of the land they occupy.

What's new?

During construction phase, gas companies have been paying rates of 66.083c in the dollar.

New rating categories, 22 and 23, designed specifically for LNG companies, charge 77.490c in the dollar and 154.980c in the dollar (22 covers a plant with one operational train; 23 covers two operational trains).

That's compared to 2.157c in the dollar charged to category 21, for example, which covers any industry using land for the "extraction of minerals, resources or other substances".

The next highest charge, other than the two new categories, is 13 which charges 60.630c in the dollar and applies to land within the Gladstone State Development area.

Most residential properties fall under category 1 which is 0.89c in the dollar.