Canada approves B.C. LNG shipments to Asia

Canadian regulators have approved a project to export liquefied natural gas from British Columbia’s west coast to markets in Asia. KM LNG, a JV between Apache Corp. (APA), Encana Inc. (ECA) and EOG Resources Inc. (EOG), received the license from Canada’s National Energy Board to export from a deepwater port in Kitimat, B.C. Initially estimated to cost CAD 5.6 billion, the license is a step forward for the project which is still undergoing a feasibility study by the partners. If the decision is made to build it, the terminal could start shipping natural gas to markets in Asia by late 2015, gradually shipping up to 1.4 billion cu/ft of natural gas a day. This is the first license Canadian regulators have issued to export LNG. KM LNG President Janine McArdle, who is also an Apache senior vice president had this to say: “Kitimat LNG represents a remarkable opportunity to open up Asia Pacific markets to Canadian natural gas. This export license approval is another major milestone for Kitimat LNG as we move forward to market our LNG supply.” The KM LNG project received a 20-year license from the Canadian government to export over 9 trillion cu/ft of gas over the life of the project. Nearby gas basins in British Columbia and Alberta owned by Apache and EOG contain over 19 trillion cu/ft of recoverable gas, according documents filed with regulators. The three companies are expected to make a decision on whether to proceed with construction in the first quarter of next year. Apache leads the project and owns a 40% stake in the joint venture; Encana and EOG each own 30% stakes.

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