Kitimat LNG has had interest in company stake

Edward McAllister, reporter, & Walter Bagley, editor; Reuters

NEW YORK, Jan 6 (Reuters) - Kitimat LNG has received interest for a stake in the company, following an invitation for expressions of interest in November, the company told Reuters late on Monday.

Kitimat, which is developing a liquefied natural gas export plant in British Columbia, Canada, said it had also received interest for gas capacity in, and off-take of LNG from, the plant.

"Large Canadian and major international energy players have expressed concrete interest in our project through the process," Ilene Schmaltz, vice president of supply marketing at Kitimat, told Reuters.

"Potential investors have expressed interest in all the opportunities Kitimat LNG is offering, including terminal capacity, offtake and equity in the company," she added.

Schmaltz said in December that it would consider a full takeover of its planned terminal, should the right offer come along.

Kitimat is talking to companies that submitted expressions of interest and is working towards a binding bid process, Schmaltz said, though discussions are only preliminary at this time.

Kitimat LNG, a wholly owned subsidiary of Galveston LNG, in September scrapped its plans for an LNG import terminal to pursue the development of an export plant, seeking to take advantage of the high-paying markets of Japan, South Korea and China.

It plans to export gas produced in Western Canada by 2013, with four to five shipments per month.

The proposed terminal will have two LNG storage tanks with capacities of 210,000 cubic metres, with potential future expansion to three tanks.

LNG is natural gas cooled to liquid for transport in specially designed tankers. It is regasified at a terminal for transport ashore through pipelines.

(Reporting by Edward McAllister; Editing by Walter Bagley)

COMMENT:

Kitimat LNG had a pretty dodgy business scheme back when it wanted to import LNG and ship it (supposedly) to the tar sands. It still has a dodgy scheme now that it says it will export BC gas. This industry and this government with all the geologists, engineers and economists had it wrong. The "markets" which in their unthinking way get everything right (according to market fundamentalists) also had it wrong. And North America, instead of running out of natural gas, apparently has lots of it, thanks mainly to shale gas. We're back to conditions which prevailed up to 2000 - lots of gas, or the LOG theory.

What this news item confirms is just how dodgy Kitimat LNG really is. There's "interest" in the company. Ooh, that is so far from money on the table. It's so far from open season commitments of interest. In fact, all we have here is a company desperate to get outa Dodge, er, Kitimat. What Kitimat LNG is looking for now is to sell out. "Schmaltz said in December that it would consider a full takeover of its planned terminal." Read: "begging for an exit."

By way of caveat, I acknowledge that my crystal ball was picked up at a dollar store.