Kitimat LNG continues to build momentum for their Liquefied Natural Gas (“LNG”) terminal to be built in Kitimat, British Columbia, announcing it has signed a memorandum of understanding (“MOU”) with Houston-based Apache Corp. (NYSE:APA). Apache will supply between 200 million and 300 million cubic feet of natural gas per day to the Kitimat facility from the Apache’s Horn River projects. Apache holds about 210,000 net acres in Horn River where individual horizontal wells in there could recover as much as 10 billion cubic feet of natural gas. Like previously announced MOUs, Apache will have an option to purchase an equity stake in the facility.
The Kitimat LNG facility will open new markets in Asia and other international markets for British Columbia’s booming natural gas industry and is a direct result of the fundamental shift in North America’s energy mix brought about by shale gas discoveries across North America including the Horn River basin.
Apache Corp. is the second major supplier to enter into a deal with Kitimat LNG. Last month, another Houston-based gas producer, EOG Resources Inc., signed a similar MOU. Earlier in the year, Kitimat signed MOUs with Korea Gas Corp. and Spain´s Gas Natural to buy the LNG that will be produced from the Kitimat plant.
Kitimat has received federal and provincial regulatory approval. Startup is expected to take place some time in the fourth quarter of 2013 with an initial planned capacity of 700 million cubic feet per day.
Wall Street Journal: Apache to Fuel Asia’s Gas Demand
Press Release: Kitimat LNG Inks MOU with Apache Corporation
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