|One of the partners in the proposed Kitimat LNG project is getting out of the LNG business in B.C. Houston-based Apache Corp. announced it is heeding advice from investors and leaving the project to focus on North American onshore aspects of its business.
Apache CEO Steven Farris said LNG’s high up-front capital costs and long-range return on investment drove the company to rethink its involvement. “It makes sense for someone else to own it that has a different time horizon than we do,” he said. He also said that Kitimat LNG remains a strong, viable project, and the project will retain its value in spite of Apache’s decision.
Kitimat LNG is considered BC’s most advanced LNG project. Key environmental approvals and agreements with First Nations are in place and site preparations in Kitimat are under way.
Shifts in ownership structure like this are to be expected, Premier Christy Clark said. She expressed confidence that B.C.’s push for an LNG sector will succeed.
Apache’s 50-50 partner in the Kitimat LNG project is Chevron. Under the current arrangement, Chevron would operate an LNG facility in Kitimat and the Pacific Trails Pipeline while Apache would provide gas from its shale gas holdings in the Horn River and Liard Basins in northeastern B.C. Chevron is considering its options following Apache’s announcement.