July 6, 2009 / 4:37 PM / 10 years ago

Spain's Gas Natural may take stake in Canadian LNG

* MOU would see Spanish firm take 30 pct Kitimat output

* Has option to take equity stake in LNG terminal

* Follows similar MOU with Korea Gas

CALGARY, Alberta, July 6 (Reuters) - Spanish natural-gas distributor Gas Natural GAS.MC agreed on Monday to take 30 percent of the output from a planned liquefied natural-gas facility on Canada’s West Coast and may buy a stake in the operation, the proposed plant’s operator said in a release.

Closely held Kitimat LNG Inc said it has signed a memorandum of understanding with Gas Natural, which will see the Spanish firm acquire up to 1.6 million tonnes of LNG a year from the Kitimat liquefaction operation for 20 years.

Gas Natural also has an option to take an equity stake in the LNG terminal.

The agreement is the second major supply deal for the Kitimat operation in just over a month. In early June it signed memorandum of understanding with Korea Gas Corp under which Kogas would acquire 2 million tonnes of LNG a year from the terminal for 20 years, with the option to acquire an equity stake in the plant.

The proposed Kitimat plant, on a port in northern British Columbia, would have the capacity to export 3.5 million to 5 million tonnes of super-cooled gas a year, the equivalent of four or five cargoes a month.

Kitimat, which was originally supposed to be an import project, now intends to export LNG from Western Canada to markets across the Pacific in Asia by 2013.

Gas Natural supplies natural gas to 11 million customers in Spain, France, Italy and Latin America, and has a generating arm producing electricity in Spain, Mexico and Puerto Rico.

It is also in a joint venture with Repsol (REP.MC), which operates a fleet of LNG carriers. (Reporting by Scott Haggett; editing by Rob Wilson)

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