Apache, the largest U.S. independent oil and natural gas producer, may conclude talks on the sale of 85% of liquefied natural gas from the Kitimat project in Canada this year, Bloomberg News reported, citing a company official. The facility is expected to have a capacity of 5 million metric tons and the company could gain final approval as early as 2012.
Texas-based Apache (APA) said it is shopping upstream, midstream and downstream stakes to prospective buyers. Kitmat's first shipments are expected in 2015, according to Bloomberg. Apache acquire a majority stake in the project earlier this year.
Due to languishing natural gas prices in the U.S., Kitmat and Apache intend to sell the gas produced at the project overseas, particularly in Asia, where demand for natural gas as a cleaner-burning alternative remains strong and prices are better than what the companies could fetch in North America.
Korea National Gas Corp. has tentatively agreed to be major customer of gas from the Apache/Kitmat project. Gas Natural SDG SA, Spain's biggest gas company, signed a preliminary agreement to buy 30%, according to Bloomberg. Both companies reportedly signed 20-year agreements.