Apache seeks partner for $1b Kitimat LNG project

Apache Corp. is seeking a buyer for part of its 50 per cent stake in the Kitimat liquefied natural gas export terminal as its spending on the project is projected to surge to $1 billion US this year.

“We can’t afford that,” Steven Farris, chairman and chief executive officer of the Houston-based oil and gas producer, said Wednesday. “We’ve had serious discussions with a number of buyers, all in Asian markets.”

The Kitimat project is one of more than a dozen proposals to harness vast gas reserves in British Columbia for export to Asia, where the fuel price can be five times higher.

Farris is “very confident” Apache and its partner, Chevron Corp., will find a buyer this year to reduce their share of costs, he said at an investor meeting.

The companies have yet to make a final investment decision on the project and Apache declined to provide an updated cost estimate for it.

Farris said in March 2012 the terminal and a pipeline for it would cost about $6 billion. Spending so far has been concentrated on clearing rights of way and preparing sites for construction, Rod Eichler, CEO of the project, said at the investor meeting Wednesday.

The companies still must negotiate with aboriginal groups and the British Columbia government, Eichler said.

The company plans to reduce spending this year by about 19 per cent after selling more than $7 billion in assets. The company is focused on using cash from international operations for North American prospects, Farris said.