The following is an excerpt from Canaccord Genuity’s Morning Coffee newsletter.
In another sign that West Coast British Columbia LNG exports might not just be a pipe dream
, Apache Corp. (
NYSE: APA,
Stock Forum) announced that it has hired Rod Eichler as the CEO for its proposed Kitimat LNG facility which it owns 50/50% with
Chevron (
NYSE: CVX,
Stock Forum).
Eichler has been with the APA for 20 years, including the past two years as its COO.
This announcement builds on the positive sentiment for Kitimat LNG exports as last week the Financial Post reported that CVX is stepping back into a leadership role in Western Canada as it looks to build and run an LNG terminal in Kitimat B.C. and exploit its Duvernay shale gas play in Alberta.
The company has gone on a hiring spree in Calgary and is opening an office in Vancouver to handle government relations. The company has commented that final corporate approval for the Kitimat LNG project is still 18-24 months away.
Last July, Chevron also took over as the operator. The deal gives the company 50% of the proposed Pacific Trail Pipeline, and 50% in approximately 644,000 acres in B.C.’s Horn River and Liard Basins.
During the next two years, the company plans to nail down fiscal terms with the B.C. government, finalize the design, make progress with site preparation in Kitimat, and conclude marketing arrangements with Asian buyers.
Recently, the press has been filled with stories about West Coast Canada LNG projects versus Gulf Coast U.S. LNG projects.
While the West Coast Canada projects struggle with higher infrastructure costs, namely pipelines to tap Montney and Liard Basin gas reserves, the Gulf Coast projects are burdened with the sheer distance they are away from customers and the dramatically higher shipping costs that result.