KM LNG buy Eurocan mill site

KM LNG Operating General Partnership announced Thursday that it has entered into an agreement to purchase the former Eurocan pulp and paper mill site from West Fraser.

KM LNG Operating General Partnership announced Thursday that it has entered into an agreement to purchase the former Eurocan pulp and paper mill site from West Fraser.

“The Kitimat LNG partners are very pleased we have reached this agreement with West Fraser,” said KM LNG President Janine McArdle.

“The purchase of the site marks another significant local investment in Kitimat and is a great step forward for the Kitimat LNG project.”

McArdle said the site will provide the KM LNG project with a suitable area for a work camp and lay-down/storage area as the project continues to move forward with clearing and grading at the proposed LNG export plant site at Beese Cove.

The sale is subject to obtaining government approvals for the transfer of related permits and licenses. Financial details of the transaction have not been disclosed.

KM LNG is a partnership between Apache Canada (40 per cent), EOG Resources Canada (30 per cent) and Encana (30 per cent).

The partnership also proposes to build a new pipeline, called the Pacific Trail Pipeline, which will run from Summit Lake near Prince George to the Kitimat plant.

KM LNG is currently in marketing discussions with potential Asia-Pacific LNG customers and expects to have firm sales commitments in place by the time a final investment decision (FID) is made.

That is expected to come late this year.

What it also needs to make that decision is National Energy Board approval of its application for a 20-year natural gas export licence.

The NEB hearing into that application reconvened in Calgary last week and wrapped up late Thursday afternoon.

That session dealt with the remaining issues: “consideration of the potential environmental effects of the proposed exportation and any social effects that would be directly related to those environmental effects, including any such effects to aboriginal interests”, and “consultation with the public and aboriginal peoples.”

It also heard final arguments on all issues raised during both this latest session and the earlier one held in Kitimat in June.

Apache Canada spokesman Paul Wyke said, “We’re very pleased with how that process has gone and we anxiously await a decision from the NEB,” adding the company was “very confident” it had made its case for the licence.

There is, however, one outstanding issue attached to the application: reaching an agreement with the Gitxaala of Kitkatla sufficient to persuade the latter not to pursue its motion for a stay of proceedings until it had received “full and adequate responses” to information requests it had submitted to KM LNG.

Wyke said negotiations and consultations continued between the two parties were proving “very positive”.

Assuming everything comes together in time for an FID to be made late this year, KM LNG has indicated it expects to ship out the first LNG towards the end of 2015.