The Canadian arm of Houston’s EOG Resources Inc. on Tuesday said it is buying the shares of Galveston LNG Inc., whose subsidiary Kitimat LNG Inc. owns 49% of the proposed liquefied natural gas (LNG) export terminal at Bish Cove, BC. Financial details were not disclosed.
Apache Corp.’s Canadian subsidiary in January bought the majority interest (51%) of the planned Kitimat project and is to be the operator (see Daily GPI, Jan. 14). Apache at the time also agreed to buy a 25.5% interest in Pacific Trail Pipelines LLC (PTP) from Galveston LNG.
“By combining our experience and resources, we are confident we can move this project to completion,” EOG CEO Mark G. Papa said of the Apache alliance. EOG plans to “build on the relationship with the Haisla First Nation and being a part of Kitimat and surrounding communities.”
Galveston LNG is a privately owned Canadian energy development company that is capitalized with private and institutional investors. The Kitimat LNG proposal is its largest project to date.
Papa gave a nod to Galveston LNG’s Alfred Sorensen and his employees “for taking a great idea and advancing it to the point where it now has the potential to attract new markets for Western Canadian natural gas supply not only in the Asia-Pacific region but globally.”
Last year Kitimat LNG signed a memorandum of understanding with EOG to supply natural gas to the proposed LNG terminal (see Daily GPI, July 14, 2009). Kitimat LNG also has MOUs with Korea Gas Corp. (see Daily GPI, June 2, 2009) and Gas Natural (see Daily GPI, July 7, 2009).
Planned capacity of the proposed Kitimat LNG terminal is about 700 MMcf/d, or 5 million metric tons/year. Preliminary construction costs, currently estimated to be around C$3 billion, are to be revised once the front-end engineering and design is completed.
Under the terms of the agreement, EOG’s offer to purchase the shares of Galveston LNG is conditioned upon the achievement of certain commercial and regulatory milestones.
The proposed terminal is being developed by privately held Kitimat LNG Inc., based in Calgary. Once EOG completes its acquisition of Galveston LNG shares, EOG and Apache propose to construct, own and operate the terminal near the Port of Kitimat, BC, where they would export via ship LNG supplies to global markets.
The Kitimat LNG terminal is designed to link to the pipeline transmission system serving Western Canada’s natural gas producing regions via the proposed Pacific Trail Pipelines (PTP), a C$1 billion (Canadian), 300-mile project originating at Summit Lake, BC.
Through its acquisition of Galveston LNG, EOG would acquire a 24.5% interest in PTP, now a partnership of Galveston LNG, Apache and Pacific Northern Gas Ltd. The proposed pipeline has received environmental assessment approvals from both the federal and provincial governments.
©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |