Encana To Acquire Interest In Kitimat LNG Terminal

April 2011 Vol. 238 No. 4

This proposed Kitimat LNG export development is intended to open new market opportunities in the Asia-Pacific region for abundant supplies of Canadian natural gas.

The proposed Kitimat LNG export development, located about 650-km north of Vancouver at Bish Cove near the Port of Kitimat, has planned initial capacity, from the first of two potential phases, of about 700 MMcf/d of natural gas. The development includes construction of a new 36-inch diameter natural gas pipeline – Pacific Trail Pipelines – running 287-miles from the Spectra Energy natural gas transmission system at Summit Lake, B.C. to the planned Kitimat LNG export facility. Encana’s 30% interest in the development includes a capacity reserve of 30% in the Kitimat LNG export facility and matching capacity on the proposed pipeline.

The partners expect to complete the front-end engineering and design for the LNG export facility later this year, after which the partners will determine plans for a capital investment decision for the first phase of the development. Project construction could begin in 2012, with exports potentially starting in 2015. The project is operated by Apache Canada Ltd., which will own 40%, with Encana and EOG Resources Canada Inc. each owning 30%, respectively. Encana’s acquisition transaction is subject to receipt of appropriate regulatory approvals and satisfaction of other customary closing conditions. It is expected to close in the second quarter of 2011.

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