By Dinakar Sethuraman, Bloomberg.com, June 7, 2011
The company may give approval for the 5 million metric-ton facility early next year after getting final sales agreements this year, Perth-based Mate' Parentich, general manager of LNG marketing at Apache, said at the Asia Oil and Gas Conference in Kuala Lumpur today.
Apache Corp. may conclude talks on the sale of 85 percent of liquefied natural gas from the Kitimat project in Canada this year, a company official said. (Photograph by: Handout, Vancouver Sun files) |
"We will offer stakes in upstream, midstream and downstream to buyers," Parentich said. Shipments may start in 2015, he said.
The Houston-based natural-gas producer bought a 51 percent stake in the Kitimat LNG project in British Columbia in January, aiming to begin shipments in 2014. More than a dozen liquefied natural gas ventures, which cool the fuel to liquid form for shipment by tanker, have been proposed in Australia to meet rising Asian demand.
Korea Gas Corp., the world's largest buyer of LNG, tentatively agreed in June to buy as much as 40 percent of the Kitimat terminal's exports for 20 years. Gas Natural SDG SA, Spain's biggest gas company, signed a preliminary agreement to buy 30 percent, also for 20 years.
Kitimat will price the shale gas-derived LNG in Asia on oil-linked terms, Parentich said. Apache will link the gas to a cocktail of Japanese crudes, a formula used by existing suppliers in Asia and the Middle East to price the fuel in Asia.
With North American gas prices slumping because of rising supplies and Asian prices propped up by growth in demand, Apache and its Kitimat partners are seeking higher profits by selling Canadian gas overseas.
The Kitimat terminal, 1,180 kilometers (733 miles) northwest of Vancouver, British Columbia, expects to ship gas tapped from fields in the province that has been selling at a discount to the benchmark price in the U.S. and Canada because of its distance from major markets.
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