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Chevron jumps on board with Kitimat LNG project

Chevron Canada has joined forces with Apache Canada to build and run the Kitimat LNG project, and develop shale gas resources at the Liard and Horn River basins in B.C.

The new agreement means Chevron and Apache Canada will become 50 per cent owners of the proposed Kitimat plan, the Pacific Trails Pipeline, and 644,000 acres in the Horn River and Liard basins.

Chevron Canada will operate the LNG plane and the PTP gas pipeline.

"This agreement is a milestone for two principal reasons: Chevron is the premier LNG developer in the world today with longstanding relationships in key Asian markets, and the new structure will enable Apache to unlock the tremendous potential at Liard, one of the most prolific shale gas basins in North America," said G. Steven Farris, Apache's chairman and chief executive officer in a press release.

Encana and EOG Resources — currently 30 percent non-operating partners in Kitimat LNG and Pacific Trail Pipeline — will sell their interests to Chevron.

Kitimat LNG is currently completing front-end engineering and design, and early site work is under way. Current plans call for two liquefaction trains, each with expected capacity of five million tons of LNG per year (about 750 million cubic feet of gas per day). Kitimat LNG has received all significant environmental approvals and a 20-year export license from the Canadian federal government.

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