Chevron in Talks to Export LNG from Canada
From Market Watch
Chevron Corp. CVX +0.20% is in talks with potential buyers for Canada’s first exports of liquefied natural gas, paving the way for a $15 billion project that would open up a new route for North American gas to Asia, the Financial Times reports Wednesday.
Chevron aims to sign contracts to sell about 60-70% of the gas ahead of the project, the report says.
The planned Kitimat plant on Canada’s west coast would export shale gas from fields in British Columbia in the form of LNG. The fields hold an estimated 50 trillion cubic feet of gas, the report says.
The project is a 50-50 joint venture between Chevron and U.S. independent oil and gas group Apache. The project has already gained an export license and permission to build a pipeline from the plant site to the coast. At capacity, it would produce 10 million tons of LNG per year, the report adds.
The report says that Chevron is keen to price the gas in relation to oil, which is higher than the price of natural gas. Japanese buyers have, however, recently taken advantage of cheaper North American shale gas to negotiate LNG contracts linked to the U.S. natural gas benchmark, according to the report.
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