Sinopec in talks to invest in Kitimat LNG project: source

Wed Nov 27, 2013 11:58am EST

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(Reuters) - Sinopec (0386.HK) (600028.SS), China's biggest oil refiner, is in talks with Apache Corp (APA.N) to buy a stake in the Kitimat LNG export project on Canada's Pacific coast, according to an industry executive with direct knowledge of the matter.

Kitimat LNG, co-owned by Apache and Chevron Corp (CVX.N), was awarded Canada's first liquefied natural gas (LNG) export license in 2011, allowing it to export 10 million tons per year.

The $15 billion project, located in northern British Columbia, is expected to begin shipping gas to Asia by 2017.

"If the conditions of the discussions meet Sinopec's requirement — meaning if it is a profitable investment - Sinopec is willing to participate," the executive told Reuters.

Sinopec is also talking to other companies for similar investments, the executive said, declining to provide details.

Apache spokesman Paul Wyke said the company did not comment on market rumors or speculation.

"There continues to be great interest in the Kitimat LNG project, and the partners (Apache and Chevron) are in negotiations with several prospective Asia-Pacific customers," he said in a emailed statement.

Chevron took a 50 percent stake in the Kitimat LNG project in February, which buoyed hopes that the multibillion-dollar gas export facility would go ahead. The partners are working toward an investment decision.

The Wall Street Journal first reported that Sinopec was in talks with Apache to buy a minority stake in the project. The size and value of the stake have not been determined, the newspaper said. (r.reuters.com/xuh94v)

A Sinopec spokesman was not immediately available for comment.

(Reporting by Chandni Doulatramani in Bangalore, Chen Aizhu in Beijing and Julie Gordon in Vancouver; Editing by Lisa Von Ahn)

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