Chevron Subsidiary Acquires Operating Interest in Western Canada LNG Project
Proposed two-train project ideally located to meet rapidly growing Asia-Pacific demand
SAN RAMON, Calif., December 24, 2012 - Chevron Corporation (NYSE: CVX) today announced that its indirect Canadian subsidiary, Chevron Canada Limited, will acquire a 50 percent operating interest in the Kitimat liquefied natural gas (LNG) project and proposed Pacific Trail Pipeline (PTP), and a 50 percent interest in approximately 644,000 acres of petroleum and natural gas rights in the Horn River and Liard Basins in British Columbia, Canada.
“The Kitimat LNG development is an attractive opportunity that is aligned with existing strategies and will drive additional long-term production growth and shareholder returns,” said George Kirkland, vice chairman, Chevron Corporation.
“This investment grows our global LNG portfolio and builds upon our LNG construction, operations and marketing capabilities. It is ideally situated to meet rapidly growing demand for reliable, secure, and cleaner-burning fuels in Asia, which are projected to approximately double from current levels by 2025.”
Under the terms of the agreements, Chevron Canada Limited will acquire all of the interests currently owned by affiliates of EOG Resources Canada Inc. and Encana Corporation in the proposed Kitimat LNG Project and PTP. Thereafter, Chevron Canada Limited will equalize interests with an Apache Corporation subsidiary, resulting in Chevron Canada Limited and Apache each holding a 50 percent interest in both the Kitimat LNG Project and PTP. Operatorship of both facilities will transfer to Chevron Canada Limited.
The proposed two-train Kitimat LNG Project, currently progressing through the Front-End Engineering and Design (FEED) phase, has a Canadian National Energy Board license to export 10 million tons per annum of LNG.
Additionally, Chevron Canada Limited will acquire approximately 110,000 net acres in the established Horn River Basin from Encana, EOG and Apache, and approximately 212,000 net acres in the Liard Basin from Apache. Chevron Canada Limited and Apache will each hold a 50 percent interest and Apache will operate these two natural gas resource developments.
The agreements are subject to regulatory reviews.
Gary Luquette, president, Chevron North America Exploration and Production, said, “This investment by Chevron Canada Limited captures significant resource and acreage in proven and emerging natural gas basins in Canada, and is a key opportunity to expand our overall North America exploration and production portfolio. It will enable our North America operations to play an increasingly important role in Chevron’s global growth.”
Jeff Lehrmann, president, Chevron Canada Limited, said, “We look forward to working with the Governments of British Columbia and Canada, First Nations, and local communities to grow this development, realize the project’s long-term economic potential, and open new markets for Canadian natural gas.”