The proposed Kitimat project has planned capacity of about 700MMcf of natural gas per day, or five million metric tons of LNG per year. Preliminary construction cost estimates of CAD3bn will be refined at the conclusion of front-end engineering and design (FEED).
Under the terms of the agreement, Apache will make an initial payment to the current owners of Kitimat LNG with additional consideration due upon achievement of certain commercial and regulatory milestones. Apache will fund the project's FEED to begin with a final investment decision expected in 2011. First LNG shipments are projected for 2014. Apache will become operator of the project.
The proposed pipeline has received both the federal and provincial governments' environmental assessment approvals and has created an arrangement to partner with the First Nations along the pipeline route. Kitimat LNG has signed memorandums of understanding for LNG sales with Gas Natural and Korea Gas Corporation, as well as memorandums with other producers for natural gas supply.
