M&A

13 January, 2010

Apache to acquire stake in natural gas terminal

On Wednesday January 13, 2010, 5:09 pm EST

HOUSTON (AP) -- A subsidiary of oil and gas company Apache Corp. is acquiring a 51 percent stake in Kitimat LNG Inc.'s planned liquefied natural gas export terminal in British Columbia.

Apache, based in Houston, said in a statement Wednesday that Apache Canada Ltd. also reserved 51 percent of capacity in the terminal.

Financial terms were not disclosed beyond Apache saying it will make an initial payment to the current owners of Kitimat LNG with additional consideration due upon achievement of certain commercial and regulatory milestones.

The proposed Kitimat project, located at Bish Cove near the Port of Kitimat about 405 miles north of Vancouver, has planned capacity of 5 million metric tons of liquefied natural gas per year.

The first LNG shipments are projected for 2014.

Kitimat is designed to be linked to the pipeline system servicing western Canada's natural gas producing regions via the proposed Pacific Trail Pipelines, a 300-mile project originating at Summit Lake in British Columbia.

Through its acquisition of a 51-percent interest in the Kitimat project, Apache will acquire a 25.5 percent interest in the pipeline, currently a partnership between Galveston LNG and Pacific Northern Gas Ltd., Apache said.

Apache shares rose $1.53 to close at $106.82, and fell 58 cents in after-hours trading.