Chevron Corporation has entered into talks with buyers over a $15 billion project that will boost Canada’s liquefied natural gas, LNG output by 10 million tons per year and would see it selling the liquefied natural gas, LNG, to buyers outside the country.
The project is expected to open up a new route for North America gas to countries in the Asian region.
According to reports, Chevron is planning to sign contracts that will see it selling about 60-70 per cent of the gas ahead of the project.
Reports said the planned Kitimat plant on Canada’s west coast would export shale gas from fields in British Columbia in the form of LNG, adding that the fields hold an estimated 50 trillion cubic feet of gas.
The report further stated that the project is a 50-50 joint venture between Chevron and U.S. independent oil and gas group Apache.
The report noted that the project has already gained an export license and permission to build a pipeline from the plant site to the coast, adding that at capacity, it would produce 10 million tons of LNG per year. .
The report says that Chevron is keen to price the gas in relation to oil, which is higher than the price of natural gas.
Japanese buyers have, however, recently taken advantage of cheaper North American shale gas to negotiate LNG contracts linked to the U.S. natural gas benchmark, according to the report.