Canada Approves Plan For British Columbia LNG Shipments To Asia
October 13 2011 - 7:02PM
Dow Jones News
A project to export liquefied natural gas from British
Columbia's west coast to markets in Asia received approval from
regulators Thursday.
KM LNG is a joint venture between some of North America's
largest natural gas producers: Apache Corp. (APA), Encana Inc.
(ECA) and EOG Resources Inc. (EOG). The venture received the
license from Canada's National Energy Board to export from the
deepwater port in Kitimat, B.C.
The license is a step forward for the project, which is still
undergoing a feasibility study by the partners. If approved, the
terminal could begin shipping natural gas to markets in Asia by
late 2015, eventually shipping up to 1.4 billion cubic feet of
natural gas a day.
It's the first license Canadian regulators have issued to export
LNG, reflecting the shift in North American gas markets over the
last several years as horizontal drilling technology unlocked vast
new supplies of natural gas from shale rock. The new supplies sent
North American gas prices plummeting, and plans to open more
terminals to import natural gas from abroad were converted to
export from oversupplied markets in the U.S. and Canada.
In a similar step, the U.S. has approved plans by Houston-based
Cheniere Energy Inc. (LNG) to export LNG from a terminal in
Louisiana.
The KM LNG project, led by Apache, received a 20-year license
from the Canadian government to export more than 9 trillion cubic
feet of gas over the life of the project.
Calgary-based Encana said in a recent presentation that an LNG
export terminal will help find markets for gas produced from the
Horn River basin in northeastern British Columbia, which is rich
but a long distance from markets in the U.S. The company estimated
that Asian countries will need an extra 15 billion cubic feet a day
of new gas supply by 2020 in order to keep up with the growth in
demand.
Encana, Apache and EOG are expected to make a decision on
whether to proceed with the terminal's construction in the first
quarter of next year, after the feasibility study is complete.
-By Edward Welsch, Dow Jones Newswires; 403-229-9095;
edward.welsch@dowjones.com
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