Monday, August 10, 2009

Liquid Natural Gas to China

(RTTNews) - Sunday, according to The Wall Street Journal, oil and gas company Apache Corp. (APA: News ) 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."

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