Energy Ink

Apache in ‘throes’ of negotiations with LNG buyers

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February 16, 2012

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Kitimat LNG would be a “step change” for Canadian natural gas markets, executives at Apache Corp. said today as the Houston-based firm released fourth-quarter results.

While the firm has yet to commit to building the $5-billion plant on Canada’s West Coast, negotiations with overseas buyers are at an advanced stage, said company chairman and chief executive G. Steven Farris.

“Frankly we’re somewhat past the polite introductions and that kind of stuff with respect to buyers,” he told analysts today. “We’re now in the throes of actual negotiations.”

Analysts expect the firm to sanction the massive development this quarter. Apache’s partners in the liquefaction scheme, Encana Corp. and EOG Resources, report year-end results tomorrow.

In an interview, Bernstein Research analyst Bob Brackett said a final investment decision hinges on front-end engineering work and on Apache booking sales deals.

“The buyers want evidence that the project’s real and the project can’t be real until they have buyers,” he said.

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