Kitimat LNG and Pacific Trails Pipeline
Apache Canada Ltd., Chevron Canada
Kitimat LNG is poised to take advantage of Kitimat's many strengths including its strategic location serving the Asia Pacific market. The National Energy Board in Canada has approved KM LNG Operating General Partnership for a license to export liquified natural gase from Kitimat, BC. The company will be allowed to export a total of 200 million tonnes of LNG over 20 years once production at the facility commences.
About This Project
In the News:
Feb. 24, 2013: PACIFIC TRAIL PIPELINES LIMITED PARTNERSHIP SIGN $200 MILLION COMMERCIAL AGREEMENT WITH 15 FIRST NATIONS REGARDING THE PIPELINE COMPONENT OF THE KITIMAT LNG PROJECT
Pacific Trail Pipelines Limited Partnership, the First Nations Group Limited Partnership, and the Province of British Columbia announced a revised benefits agreement for the proposed 463-kilometre Pacific Trail Pipeline Project that will ensure First Nations receive immediate and long-term benefits from the PTP Project. Read Full News Release.
Feb. 11, 2013: APACHE, CHEVRON COMPLETE CHEVRON CANADA'S ENTRY INTO KITIMAT LNG
Apache Corporation announced that its subsidiary Apache Canada Ltd. has completed the previously disclosed transaction with Chevron Canada Limited to build and operate the Kitimat LNGproject and develop world-class natural gas resources at the Liard and Horn River basins in British Columbia,Canada.
Chevron Canada, a subsidiary of Chevron Corp, and Apache Canada each have become a 50 percent owner of the Kitimat LNG plant, the Pacific Trail Pipelines and 644,000 gross undeveloped acres in the Horn River and Liard basins. After a brief transition period, Chevron Canada will assume operatorship of the LNG plant and the pipeline. Apache Canada increased its ownership in the LNG plant and pipeline from 40 percent and will operate the upstream assets. Apache's net proceeds from the transaction were $405 million. Read Full News Release.
The proposed Kitimat LNG facility is a unique project designed to export a secure supply of Canadian liquefied natural gas (LNG) from new, unconventional plays in British Columbia to the Asia-Pacific region. This joint initiative will include LNG storage and marine on-loading facilities in Kitimat, British Columbia.
Kitimat LNG's export terminal will be served by Pacific Trail Pipelines Limited Partnership's natural gas transmission pipeline system which will run from Summit Lake to Kitimat. The 463-kilometre, 914 mm (36 inch) diameter underground line will provide the terminal with a direct connection to the Spectra Energy transmission pipeline system and excellent access to natural gas supplies in British Columbia.
Apache Canada Ltd has signed an agreement with Chevron Canada Ltd to build and operate Kitimat LNG and develop world-class shale gas resources at the Liard and Horn River basins in BC. Apache Canada and Chevron Canada are 50% owners of KLNG, the Pacific Trail Pipeline, and 644,000 gross undeveloped acres in the Horn River and Liard basins. Chevron Canada Ltd will operate the LNG plant and the pipeline; Apache Canada will operate the upstream assets.
In October 2011, the National Energy Board in Canada approved an application by KM LNG Operating General Partnership for a license to export LNG from Bish Cove, located near Kitimat, BC. The application was submitted in December 2010. As a result, the company will be allowed to export a total of 200 million tonnes of LNG over 20 years once production at the facility commences.
Construction of the Kitimat LNG facility is planned to begin in 2013, with commercial operations expected to commence in late 2016. Initially, the facility will produce five million tonnes annually of liquified natural gas (or the equivalent of nearly 700 million cubic feet per day) with plans to eventually double capacity. As a result, KM LNG has been approved by the National Energy Board of Canada for production totalling 10 million tonnes per annum.
Apache and other owners of the project intend to produce LNG using non-conventional resources such as shale gas as a feedstock, which is abundant in Britsh Columbia and Alberta. Liquified natural gas will be primarily exported to Asian markets where demand is expected to continue to grow. The National Energy Board of Canada evaluated the project as opening up new markets that could lead to development of further gas projects within Canada.
LNG production is scheduled to start around the end of 2016. In 2011, Apache and its partners placed an order with the US KBR Inc. for front end engineering design work and reached an agreement with West Fraser concerning the acquisition of the former Eurocan industrial site. The companies are expected to utilize the site to load and unload materials that will be necessary for construction of the liquefaction plant, as well as for the workers' camp.
Additionally, the Kitimat LNG partners are currently undertaking a Front End Engineering and Design (FEED) study, which is expected to provide certainty around project design, construction timelines and costs and labour force requirements. This study will be completed in order to initiate project construction in 2013.
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