Kitimat LNG Partners Buy Share In Pacific Trail Pipelines
By 250 News
Kitimat, B.C. – There’s a major sell-off in a billion dollar pipeline project in the north.
Pacific Northern Gas has agreed to sell its 50% interest in the Pacific Trail Pipelines to Apache Canada and EOG Canada, the Kitimat LNG partners, for $50 million. The $1.2 billion pipeline is to run 463 km between Summit Lake and a liquefied natural gas terminal to be built at Bish Cove which will allow exports to Asian markets.
Apache Canada and EOG Canada will pay PNG $30 million on closing – expected by the end of February – and a second payment of $20 million when the purchasers decide to proceed with construction of the Kitimat liquefied natural gas (LNG) export facility.
"Acquiring the PTP is an important step in building a comprehensive system that will enable Apache and EOG to tap Asian markets for our abundant natural gas resources in the Horn River Basin and elsewhere in Western Canada," says Janine McArdle, president of Kitimat LNG.
Pacific Northern Gas says the agreement will mean the projects will have a better chance of moving forward. The company says the operating and transportation service deals negotiated as part of the agreement will result in PNG customers getting a break on gas delivery rates similar to the reductions generated by the company keeping its stake in the pipeline.
Apache and EOG say they are in marketing discussions with potential LNG customers in the Asia-Pacific and expect to have firm sales commitments by the time the export facility is forecast to start operating in 2015.
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In any event the same argument holds true about undercutting our energy advantage by exporting out of North America on world market rates (for the energy industry we aren't Canadians, we are consumers to bid up the price)... but at least this project doesn't have such a huge environmental impact and risk like the Gateway one would with its tar oil.
Be interesting to see how the two pipelines stack up anyways... environmentally, economically, royalties, risk, regulatory...