Apache Kitimat Chief Says Cheniere Deal Changed Expectations
A recent deal by Cheniere Energy Inc. (LNG) to sell liquefied natural gas based on Henry Hub pricing has made it difficult to sign long-term LNG contracts based on oil prices, the head of Apache Corp. (APA)’s Canadian LNG export projects said.
“It created quite a ripple through the marketplace,” said David Calvert, an Apache vice president and manager of the Kitimat LNG joint venture. He said at a conference in Calgary the deal has created “unrealistic expectations.”
Calvert said that new projects like the Kitimat LNG project, which is being planned to export Canadian gas to Asia from the British Columbia port of Kitimat, need long-term contracts based on oil prices rather than gas prices.
North American natural gas prices have plunged against oil amid a glut. In Asia, natural gas trades at as much as five times U.S. prices.
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