Canada’s Liquefied Natural Gas (LNG) projects on the Pacific Coast near Kitimat are prompting joint venture deals to meet the demand of additional natural gas supplies needed to fill export facilities.
A substantial number of the world’s largest gas corporations aren’t wasting any time when it comes to cashing in on lucrative LNG projects in North America.
The tremendous amount of natural gas in Canadian and American underground reserves will be exported in the form of liquefied natural gas to Asian markets that are willing to pay at least five times current North American natural gas prices.
Several proposed joint ventures already in the works include:
1. Kitimat LNG, Apache Corp., Encana Corp., and EOG Resources
2. BC LNG – private 13-member co-operative
3. Royal Dutch Shell is partnering with Korea Gas Corp., Mitsubishi Corp and China National Petroleum Corp.
4. Progress Energy Resources Corp and Malaysian company, Petronas
5. British BG Group recently announced a partnership with Port Authority
Export facilities in the Kitimat area require roughly 44 tcf (trillion cubic feet) to 100 tcf of resources per facility.
Not only are major corporations coming together to come up with the money to secure gas supplies for these massive LNG export projects, but also to fund new pipeline construction needed to connect export terminals to northeastern shale gas fields.
These global gas giants aren’t just eyeing up Kitimat’s prolific natural gas holdings; Encana Corporation recently finalized its partnership agreement with Japanese Mitsubishi Corp to gain access to over 400,000 net acres of Cutbank Ridge natural gas supplies in Northeastern British Columbia.
Furthermore, LNG production investment is stimulating major merger activity across the globe. Australia has seen a slew of recently inked joint venture deals including partnerships between Thiess and EVT for the Chevron-operated Wheatstone Project and LogiCamms and Chevron Australia on the Gorgon Project. India’s Reliance Industries and BP have also entered into negotiations.
We’re currently seeing million-dollar joint venture contracts pop up all over the world from North America to Europe and the Middle East all the way to Down Under. However, experts worry that these highly lucrative LNG projects will meet short-term natural gas demand with the potential for several of these company’s untapped natural gas resources to be exhausted by 2020.
Until next time,