Kitimat LNG's Port of Calling

That ambitious vision started looking much more realistic this summer after the company reached key memorandums of understanding (MOUs) with some major gas buyers and suppliers. Korea Gas Corp. and Spain’s Gas Natural SDG SA have expressed interest in buying LNG from the terminal, and EOG Resources Inc. and Apache Corp. – two multinational gas companies based in Houston, Texas, and with operations in northern B.C. – have signed MOUs to supply the gas. Although the agreements aren’t final, Kitimat LNG president Rosemary Boulton explains why the support of such major companies makes the terminal more real than it has ever been before.


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It’s always challenging for a small company like ours to put together a project like this. More traditionally in the LNG business, the projects are put together with the Shells and the Exxons of the world. And people had never really looked to Canada as having enough gas to really compete in the LNG market, so we did have some educating to do. 


The most important part for us to validate was the global need for LNG, so we had a request-for-proposals process that went out to potential gas buyers in December, and that’s what stimulated the official interest. The customers are all looking for security of supply, and there’s a tremendous amount of natural gas that’s been developed recently in Canada. 


So we sort of anchored our foundation customers, and then we turned around and made sure that we had gas being supplied on the other side of the terminal. But getting producers on this side of the pond to commit to long-term contracts is a bit of an education job as well, because the North American gas market has really become such a short-term market; they can sell day-to-day, month-to-month, even hourly if they want to. 


The MOUs aren’t final agreements, but they’re strong enough to provide a good commercial framework as we set out to raise capital to finance the project. We’ve had a great deal of interest in that regard as a result of the pedigree companies

Our team has been together for 5½ years, so when we start making significant progress and key partnerships, we’re all pretty excited around here. It really makes the project become a lot more realistic than it has been previously. We just look forward to being able to bring this project home.