LNG supply deal in sight for B.C. project

Kitimat LNG, one of two projects working on liquefied natural gas terminals on the northern British Columbia coast, hopes to have a supply deal in place late this year.

Company President Rosemary Boulton told the Calgary Herald that negotiations are under way with partners of Peru LNG, led by Spain’s Repsol, for 4 million metric tons a year of LNG.

That would meet 58 percent of the planned capacity for the terminal. A memorandum of understanding has already been signed with Australia’s Liquefied Natural Gas Ltd. to deliver another 1.8 million metric tons.

Boulton said the progress so far allows Kitimat to start site preparation for the C$700 million complex, which has a targeted startup date of 2010-2011.

The gas, which could start at 600 million cubic feet per day and climb to 1 billion cubic feet per day, is expected to find customers in Alberta, notably the oil sands, along with British Columbia and the U.S. Pacific Northwest.

Plans are also in the works by Kitimat’s parent Galveston LNG to build a C$1 billion, 180 mile loop pipeline from Kitimat to Sumas to carry the gas.

—Gary Park