Thursday, May 20, 2010

Kitimat: LNG Going the Right Direction (Export)

I found it interesting that EOG Resources bought a 49% stake in Kitimat, the proposed Canadian LNG port that would be located on the Pacific coast about 400 miles north of Vancouver, B.C.  The 700 MMcf/day project, which is 51% owned by Apache Corp., still must go through the regulatory approval process, but it already has lined up contracts with Korea Gas Corp. and Spain's Gas Natural SDG SA.  EOG also acquired a 24.5% interest in Pacific Trail Pipelines, which will supply gas to Kitimat.

If approved, Kitimat would be the only LNG export facility in North America other than the Kenai terminal in Cook Inlet Alaska, owned by ConocoPhillips and Marathon Oil.  With the huge potential for natural gas from prospects like the Horn River Shale and the Montney Shale, British Columbia will be awash in natural gas in a few years (sound familiar?).  But with the abundance of shale gas in the Lower 48 and the prospects for a large natural gas pipeline from Alaska to the Lower 48 (either the state's plan or the Denali pipeline - both still a big uncertainty), it makes a lot of sense to export the gas to the west because the market to the south will be saturated. 

If Kitimat stays on schedule, it could begin construction in 2012 and be open in 2014.

3 comments:

Trevor J. Murphy said...

There are some major developments happening in European shale plays as well - mostly spawned by the shale boom in America. To learn more visit www.naturalgasforeurope.com

Anonymous said...

Just a note, that the Kitimat LNG facility has already received all its permits and could begin construction at any time

Robert Hutchinson said...

Thanks for the correction. RH