UPDATE 2-Apache buys into C$3 bln Canada LNG export plant

* Apache buy 51 pct of equity, capacity of Kitimat project

* Kitimat still seeking partners to help fund construction

* Initial cost estimate at C$3 bln, output seen in 2014 (Adds details from conference call, background, byline)

By Braden Reddall

SAN FRANCISCO, Jan 13 (Reuters) - Apache Corp (APA.N), the largest independent U.S. oil and gas company by market value, is buying control of a liquefied natural gas plant on Canada's west coast that will export some of North America's surplus gas.

Apache said on Wednesday it had secured 51 percent of the equity and capacity at the proposed Kitimat LNG export terminal in British Columbia, which will have capacity of 700 million cubic feet per day and cost an estimated C$3 billion ($2.9 billion) to build. Financial terms were not disclosed.

The investment is based on expectations that there will be a North American natural gas glut for some time due to greater extraction of the plentiful supplies trapped in shale rock.

"It (Kitimat) could benefit other markets by being able to export some of the surplus gas," Tim Wall, head of Apache Canada, told reporters on a conference call.

The project's history reflects the shifting perspective about North American gas, with Kitimat abandoning plans for an LNG import terminal in 2008 in favor of the current plan.

Kitimat LNG has initial sales agreements with Spain's Gas Natural (GAS.MC) and Korea Gas Corp (036460.KS), as well as other producers to supply the terminal at Bish Cove, about 405 miles (650 km) north of Vancouver.

A "BIG STEP" TO COMPLETION

EOG Resources Inc (EOG.N) was looking to supply 100 million to 200 million cubic feet per day, according to Kitimat LNG CEO Rosemary Boulton, who told reporters she had lined up buyers for about half of the terminal's capacity.

Boulton also said Kitimat would be seeking additional partners to help fund the construction, but that the Apache deal was a "very big step" toward getting there.

Front-end engineering and design would begin in the next few months, with a final investment decision expected next year and first gas expected out of the terminal in 2014, Wall said.

Quickly growing Asia-Pacific customers would likely take up much of the gas, but Boulton said the expanded Panama Canal, also set to open in 2014, would open up Atlantic markets too.

Through its acquisition, Apache will become Kitimat's operator and acquire 25.5 percent of the proposed Pacific Trail Pipelines, a C$1.1 billion, 300-mile joint venture between Kitimat's parent, Galveston LNG, and Pacific Northern Gas Ltd.

Houston-based Apache owns gas exploration and development activity in Alberta, Saskatchewan and British Columbia, including the Horn River Basin where it estimates it has access to a net 10 trillion cubic feet of gas.

"The growing supply of natural gas in the United States and Canada is transforming North American energy markets, and this increased resource has significant potential for global impact," Apache CEO Steve Farris said in a statement. (Reporting by Braden Reddall; Editing Bernard Orr)