Kitimat LNG signs deal with Korea Gas Corp. worth $20 billion

Artist rendering of Kitimat LNG Inc.'s proposed processing plant

British Columbia’s abundance of shale gas in the Horn River and Montney basin is one small step closer to reaching customers in Asia.

Kitimat LNG Inc., signed up another customer by entering a memorandum of understanding with Korea Gas Corp. (“KOGAS”) the world’s largest importer of liquified natural gas (“LNG”). According to the terms of the agreement, Korea Gas will acquire up to 40% of Kitimat LNG’s production, or two million tonnes per year for 20 years with an option to acquire an equity stake in the terminal. The total purchase value over that period would be more than US$20 billion.

Earlier in the year, Mitsubishi Corp., entered a a non-binding agreement with Kitimat LNG whereby Mitsubishi would buy 1.5 million tonnes a year of terminal capacity and acquire a minority equity interest in the terminal.

The Kitimat LNG terminal would expand British Columbia’s natural gas market from the  Horn River and Montney basin to customers in Asia including Korea, Japan and China.