EnCana has eye on LNG

British Columbia’s Kitimat LNG project got a significant, if qualified vote of confidence from another gas producer.

This time the expression of interest couldn’t have come from a more influential player.

Bill Oliver, EnCana’s vice president of Canadian gas marketing, said anything the industry can do to make the project go forward “would be very positive” for the gas sector in Canada.

Without declaring either way whether EnCana would be willing to join EOG Resources in the line-up of companies contributing gas volumes to Kitimat LNG, Oliver set only one major condition on EnCana’s participation.

He said any supply contract would “have to equate to other options” the big independent has to sell gas in Canada.

“But it’s premature for us to talk about that,” Oliver said, laying out what steps the project has to complete.

He said the proponent, in attempting to find a market for the LNG, has signed some memorandums of understanding with Asian customers and now needs commitments from Canadian producers.

EnCana might be ready to play a supply role “given the right commercial contracts and circumstances,” he said, adding “there shouldn’t be any problem getting enough gas” from the anticipated growth of shale and tight gas volumes in British Columbia.

“What (Kitimat LNG) really needs now is someone to build a liquefaction plant (at the deepwater port of Kitimat) to match up buyers and sellers,” Oliver said.

—Gary Park