Apache May Be First on Canada LNG, British Columbia Premier Says
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A group led by Apache Corp. (APA) may beat rivals including Royal Dutch Shell Plc (RDSA) to become the first to export liquefied natural gas from Canada’s Pacific Coast, British Columbia Premier Christy Clark said.
“We will have three LNG plants up and running by 2020, the first by 2016,” Clark said in an interview yesterday in Tianjin, China, where she’s attending the World Economic Forum. “Apache, Encana, their project will probably be first to go.”
The Apache-led Kitimat LNG, a $15 billion venture with Encana Corp. (ECA) and EOG Resources Inc. (EOG), is among four groups working to liquefy gas and ship it to Asia, allowing Canada to diversify from the North American market, where gas prices have fallen to 10-year lows this year because of rising output.
Canada’s LNG shipments may rise to 4 trillion cubic feet a year by 2020, putting the country among the top five exporters in the world, Clark said.
“We are moving at lightning speed to try to enable this,” she said. “We need to be in the exports market sooner rather than later to lock up those contracts.”
Clark is on her second trip to China since November and is traveling to Beijing today. Interest in China is “very, very big,” she said.
State-owned PetroChina Co. (857), China’s biggest oil and gas producer, is partnering with Shell, Mitsubishi Corp. (8058) and Korea Gas Corp. (036460) for their LNG project in British Columbia. Other groups include those led by the U.K.’s BG Group Plc (BG/) and Haisla Nation, an aboriginal group centered in Kitimat.
“Currently, we are captive to the North American market,” Clark said. “If we have potential customers in Korea, Japan, China, India, we’ll be looking at a better price.”
Gas futures in New York fell to the lowest in more than 10 years in April. Contracts for gas delivery in October jumped 6.5 percent to $2.995 per million British thermal units at 1:44 p.m. on the New York Mercantile Exchange.
“The differential between Asia and North American prices is going to remain very large,” Clark said. “Whether or not the price comes down, it’s still going to be a good deal for us and for investors to move it offshore.”
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