HOUSTON, Feb. 11, 2013 /PRNewswire/ -- Apache Corporation (NYSE, Nasdaq: APA) today announced that its subsidiary Apache Canada Ltd. has completed the previously disclosed transaction with Chevron Canada Limited to build and operate the Kitimat LNG project and develop world-class natural gas resources at the Liard and Horn River basins in British Columbia, Canada.
Chevron Canada, a subsidiary of Chevron Corp (NYSE: CVX), and Apache Canada each have become a 50 percent owner of the Kitimat LNG plant, the Pacific Trail Pipelines and 644,000 gross undeveloped acres in the Horn River and Liard basins. After a brief transition period, Chevron Canada will assume operatorship of the LNG plant and the pipeline. Apache Canada increased its ownership in the LNG plant and pipeline from 40 percent and will operate the upstream assets. Apache's net proceeds from the transaction were $405 million.
"With Chevron's LNG experience and Apache's upstream track record, this team is ideally suited to move this project forward toward delivering the tremendous resources at Liard and Horn River to meet Asia's growing demand for LNG," said G. Steven Farris, Apache's chairman and chief executive officer.
Liard and Horn River are two of the most prolific shale gas plays in North America, with more than 50 trillion cubic feet of resource potential on the Apache-Chevron acreage.Encana and EOG Resources – formerly 30 percent non-operating owners in Kitimat LNG and Pacific Trail Pipelines – sold their interests and exited the venture. Kitimat LNG, at Bish Cove on the northern British Columbia coast approximately 400 miles (650 km) north of Vancouver, is currently completing front-end engineering and design, and early site work is under way. Current plans call for two liquefaction trains, each with expected capacity of 5 million tons of LNG per annum (about 750 million cubic feet of gas per day). Kitimat LNG has received all significant environmental approvals and a 20-year export license from the Canadian federal government. The 290-mile (463-km) Pacific Trail Pipelines will provide a direct connection between the Spectra Energy Transmission pipeline system and the Kitimat LNG terminal. The project has strong support from many of the First Nations along the route.