Apache Moves Forward With LNG

By Eric Fox | June 27, 2012 AAA

Liquefied natural gas (LNG) is an important part of future production for Apache (NYSE:APA) with the company estimating that it will derive between 90,000 and 140,000 barrels of oil equivalent (BOE) per day of production from various LNG projects by 2016.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Wheatstone LNG
Apache is part of the Wheatstone LNG project under construction by Chevron (NYSE:CVX) in Australia. The company owns a 13% non-operated interest here.

The first phase of Wheatstone will involve the development of the Wheatstone and Iago offshore natural gas fields, where production will be transported to an onshore LNG facility for processing. The project is also expandable and will produce from other oil and gas fields in the area.

SEE: A Natural Gas Primer

The facility will consist of two trains with an annual capacity of 1.25 billion cubic feet per day. Apache expects the first shipments from Wheatstone in 2016 with the gas destined for various buyers in Asia. The company estimates that its net production from here will be 39,400 BOE per day.

Kitimat LNG
Apache owns 40% and is the operator of the Kitimat LNG project located on the Western coast of Canada in British Columbia. This plant will have a single train and have an annual capacity of 770 million cubic feet per day.

The Kitimat LNG project will handle production from various natural gas fields in Western Canada, including the Horn River Basin. Apache has 196,000 net acres under lease here and is producing 90 million cubic feet per day of natural gas. The company estimates that it will recover 9.2 trillion cubic feet of natural gas from its Horn River Basin properties.

SEE: How To Profit From Natural Gas

Apache also has acreage in the Liard Basin prospective for natural gas and plans to ship some production from here to the Kitimat facility. The company reported a recent well here with an average production of 21.3 million cubic feet per day during the first 30 days.

EOG Resources (NYSE:EOG) and Encana (NYSE:ECA) are also involved with the Kitimat LNG plant, and they each own a 30% stake of the project.

Other Operators
Conoco Phillips (NYSE:COP) operates the Kenai LNG facility, located in Nikiski, Alaska. The plant was built in 1969 and recently restarted operations despite being designated for permanent closure by the company.

SEE: Natural Gas Industry: An Investment Guide

The Bottom Line
Although Apache is known for its focus on oil and liquids development across the globe, the company is also involved with several large scale LNG projects and will use these projects to meet production growth goals set by the company.

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

comments powered by Disqus
Related Analysis
  1. The ADX Shows Strong Uptrends In These 4 Stocks
    Chart Advisor

    The ADX Shows Strong Uptrends In These 4 Stocks

  2. Falling Prices Are Dragging These Gold Stocks Down
    Chart Advisor

    Falling Prices Are Dragging These Gold Stocks Down

  3. Downward Trend Channels for the Market Correction
    Chart Advisor

    Downward Trend Channels for the Market Correction

  4. Oil, Oil Stocks: What The Charts Are Saying
    Chart Advisor

    Oil, Oil Stocks: What The Charts Are Saying

  5. Stocks Breaking Below Head and Shoulders Patterns
    Chart Advisor

    Stocks Breaking Below Head and Shoulders Patterns

Trading Center