Opening Canadian natural gas supplies to new markets in Asia took another step forward as Apache Corp. acquired majority control of a planned $3.0 Billion Liquid Natural Gas (“LNG”) facility in Kitimat, British Columbia. Apache, has reportedly purchased a 51% stake in the facility and took the same share of the export capacity.
Kitimat LNG was originally conceived as an import terminal for LNG. But as natural gas was unlocked from shale gas plays across North America, and specifically in the Horn River Basin in northeast British Columbia where natural gas in place could be as much as 500 trillion cubic feet. The bottom line is that North America is awash in natural gas and natural gas is slowly being recognized as a valued cleaner fuel alternative to oil and gas.
Even with increased domestic consumption through improving economics, and increased demand as natural gas is used as a cleaner alternative (hopefully), there will be excess capacity for export. Canada is the 3rd largest producer of natural gas in the world. After domestic consumption, Canada exports the excess to the U.S. However, shale gas has increased the estimated reserves of natural gas in the U.S. by an estimated 40%. Some see exports to the U.S. declining which justifies the opening of new markets in Asia and elsewhere.
Glove & Mail: Apache bets on B.C. gas
Also see: Apache signs supply deal with Kitimat LNG (August 2009)