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British Columbia: New terminal for LNG exports to China

Picture – Horn River News

WSJ: Apache To Provide Natural Gas To Proposed Kitimat LNG Terminal For Export To Asia – Update

December 18, 2009

(RTTNews) – Sunday, according to The Wall Street Journal, oil and gas company Apache Corp. (APA) has agreed to provide natural gas to Canadian firm Kitimat LNG Inc. for export to Asia through Kitimat’s proposed liquefied-natural-gas or LNG export terminal in Kitimat, British Columbia. The construction of the $3-billion LNG export facility is set to begin in late 2009 or early 2010, with the LNG facility coming into operation 36 to 40 months later by 2013 or 2014. The companies are expected to announce an agreement on Monday.

Privately-owned Calgary-based Kitimat LNG is committed to build a state-of-the-art LNG terminal in Kitimat that would transport natural gas via a pipeline from the Western Canadian Sedimentary Basin to the Kitimat LNG Terminal, where the natural gas will be cooled to -160 degrees centigrade, condensed and liquefied in preparation for export via ship to Asian markets. In Asia, the LNG will undergo a regasification process and be transported through pipelines to its final destination.

Pursuant to an agreement, Kitimat LNG and Houston, Texas-based Apache would negotiate a definitive agreement under which Apache would supply specific quantities of the LNG facility’s 700 million cubic feet per day of natural gas feedstock. In mid-July, EOG Resources, Inc. (EOG) also signed a memorandum of understanding or MOU, to supply natural gas to Kitimat LNG’s proposed LNG export terminal.

In a statement while signing the EOG agreement, President of Kitimat LNG Rosemary Boulton said, “Kitimat LNG presents a compelling opportunity for producers to leverage growing natural gas reserves in Western Canada and sell into significant new international markets such as Asia.”

After EOG, Apache is the second major North American gas producer to have reportedly agreed to supply natural gas to Kitimat LNG. Kitimat LNG has also signed MOUs with leading LNG companies such as Korea Gas Corporation (KOGAS) and Gas Natural for the purchase of LNG produced at the terminal. However, there are other companies active in British Columbia, where the proposed project is situated, including EnCana Corp. (ECA, ECA.TO)), Devon Energy Corp. (DVN) and industry giant Exxon Mobil Corp. (XOM).

Kitimat LNG’s export terminal proposal is supported by natural gas market fundamentals that show growth in the supply of natural gas in Western Canada and strong, growing demand for natural gas in Asia. As a politically and economically stable country that is close to Asian markets, Canada offers a reliable, plentiful natural gas supply to customers in the Pacific Rim.

The project is expected to take advantage of the rising natural gas demand and the higher LNG prices in Asia, with prices Asian prices expected to continue to climb. The U.S. natural gas prices have been stuck at between US$7 and $9 per million British Thermal Units or BTU, for most of the year, while in Asia, LNG have been traded with increasing frequency at record spot prices of US$20 per million BTU.

The Kitimat project comprises of a 40-hectare LNG export terminal site with two storage tanks, marine jetty and berthing facility. It would have an annual LNG capacity of three to five million tons and would take about 36 to 40 months for completion. It would handle three to five shipments monthly and would target key potential markets like Japan, South Korea, China, and Taiwan. – source

December 18, 2009 - Posted by | Economics, Malthusian Ideology, Phony Scarcity

1 Comment »

  1. The Kitimat crowd can only dream this because Alcan
    ripped off the BC Gov’t, back in the day.

    Today, the Haida Nation will not allow this danger
    to it’s Territory.

    The End.

    Comment by mot | December 19, 2009 | Reply


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