Apache CEO Says Kitimat LNG Project May Go Ahead This Year
Apache Corp. (APA), the second-largest U.S. independent oil and natural-gas producer by market value, said it’s moving toward a decision to go ahead with its Kitimat liquefied natural-gas export project in Canada this year.
“I truly believe we’re going to get it done,” Chief Executive Officer Steve Farris said in an interview today at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates.
The price tag is an estimated $15 billion, including about $5 billion to $6 billion for a plant and pipeline, with another $9 billion in investment related to drilling wells, Farris said. Apache has a 40 percent stake in the project, while Encana Corp. (ECA) and EOG Resources Inc. (EOG) each have 30 percent.
Canadian regulators already gave a green light to the Kitimat export proposal. The plant, to be located near Kitimat, British Columbia, gained approval to export 200 million metric tons of liquid natural gas over a 20-year period, Canada’s National Energy (TAQA) Board said on its website last year.
It’s “too close to call right at the moment” whether output from Kitimat will start in 2015 or 2016, Farris said. Apache is seeking to negotiate agreements with potential LNG customers who would take the fuel to Asia, Farris said. Gas exports make sense for Canada, he said, while the U.S. should focus on increasing the use of gas such as in automobiles.
Farris said he expects a decision on Kitimat in 2012, though he’s not stuck on dates and doesn’t want to be tied into a decision by a certain time. Apache previously had planned to make a decision early this year.
“The most important thing is getting it done,” Farris said.
In the Permian Basin (PBT), Apache has enough assets to grow without adding to its position there, Farris said. Apache isn’t interested in buying Chesapeake Energy Corp. (CHK)’s Permian assets, he said.
Apache also isn’t looking for a big acquisition this year, though purchases are possible if they provide “upside” to increase value beyond current production, Farris said.
Anadarko Petroleum Corp. (APC) is the largest U.S. independent oil and gas producer by market value.
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