China's largest refiner is in early talks with U.S.-based oil-and-gas producer Apache Corp. APA -1.81% to buy a minority stake in a liquefied natural-gas project on Canada's Pacific coast, people familiar with the matter said on November 26, Wall Street Journal has reported.
The LNG project, known as Kitimat, is one of several LNG projects that China Petrochemical Corp. is looking at in the region, one of the people said. The management team of the Chinese company, known as Sinopec, has yet to authorize the investment, and it could select another Canadian LNG project to invest in, the person said.
Although the size and value of the stake hasn't been determined, Sinopec's investment would go toward paying for the cost of the project, one of the people said. Apache last year pegged the cost at $15 billion.
A Sinopec spokesman said it was inappropriate to comment on corporate actions prior to public announcement.
"Apache is moving forward with the project, and we're looking for partners," an Apache spokesman said. He declined to comment on potential talks and said the cost of the project was being recalculated.
Apache Corp. in February upped its stake in Kitimat from 40% to 50%, which valued the project at $4.05 billion. The assets in Kitimat, a coastal town in British Columbia, include an LNG processing plant, pipelines and 644,000 acres of undeveloped shale resources. Apache will operate the upstream assets, while its partner--U.S.-based Chevron Corp., which own the other 50%--will operate the downstream assets.
Copyright: Wall Street Journal, 2013