REPORTING · 13th January 2010
Houston, Texas', Apache Corporation, through its Canadian Office in Calgary, Apache Canada Ltd. has announced it is taking over a majority ownership stake, 51%, in Kitimat LNG. At the same time Mitsubishi Corporation signed on to take 30% of the terminals capacity with a minority equity position. The combined deals secure over 80% of the proposed capacity of the facilities production plan.
Apache operates in numerous Countries around the globe including Australia, Argentina, Egypt and Great Britain’s North Sea. In Canada they are the largest producer of Coal Bed Methane and have many shale recovery operations throughout Alberta and Saskatchewan. Northeast BC is proving to provide exciting promises for the development of these resources and the Company expects to deliver the product for export through Kitimat.
Contained within the deal between Apache and the current owner of Kitimat LNG, Galveston LNG, is the proposed Pacific Trails Pipeline. This 463 kilometer, 1.1 billion dollar pipeline has already received Federal Government approvals and will be constructed between Summit Lake, near Prince George, and Kitimat before the first scheduled shipments of LNG expected in 2014. This deal will split the ownership interest in the pipeline where Apache retains 25.5%, Galveston 24.5% and with Pacific Northern Gas (PNG) retaining its previous 50% stake.
The $3-billion facility could export as much as 680 million cubic feet per day of which Apache will secure 51% of the rights with this deal. Apache said it will fund engineering and design costs and operate the facility when it is built however a decision to construct won't likely come until 2011.
“Development of the Kitimat LNG project has the potential to open new markets in the Asia-Pacific region for gas from Apache's Canadian operations, including the Horn River Basin in northeast British Columbia, where our net estimated resource potential exceeds 10 trillion cubic feet of gas,” stated G. Steven Farris, Apache's chairman and chief executive officer , in a news release.
"Kitimat LNG has made significant progress with provincial and federal environmental approvals, gaining support of the Kitimat community and engaging in positive consultations with the Haisla First Nation," Farris said. "We're grateful to Alfred Sorenson and Rosemary Boulton, president and CEO of Kitimat LNG, and their teams for the hard work required to advance the project to this key point. We are looking forward to continued collaboration to bring this project to completion.
"Apache will bring the same sense of urgency and commitment to environmental responsibility that is present in all of our operations around the world as we continue to develop this project in collaboration with the Kitimat community and Haisla First Nation," Farris said.