Kitimat LNG Inc. and Mitsubishi Corp. announced Tuesday that they have signed a Heads of Agreement under which Mitsubishi will acquire terminal capacity and an equity stake in Kitimat LNG's proposed liquefied natural gas (LNG) export terminal.
The Heads of Agreement sets forth the terms, pursuant to which Mitsubishi will commit to purchase 1.5 million tons per annum (mtpa) of terminal capacity and acquire a minority equity interest in Kitimat LNG's 5.0 mtpa project in Kitimat, B.C. The transaction is expected to be finalized and closed by March 31, 2009.
"We are pleased to welcome Mitsubishi, an influential leader in the LNG industry, to our project," said Rosemary Boulton, President of Kitimat LNG. "This agreement demonstrates the strategic value of the project, and is a n important step forward in ensuring Kitimat LNG's long-term success."
"Mitsubishi is an industry leader in the global LNG sector, and handles nearly half of the LNG imports to Japan," said Kazuyuki Mori , Vice President & General Manager, Business Development Unit, MC. "We are excited to be a strategic partner and an anchor tenant of this project, which offers the unique opportunity to work with Kitimat LNG to link Western Canada's natural gas supplies to Pacific Rim markets."
Kitimat LNG is continuing a process for interested parties to participate in equity investment, terminal capacity use, and off-take in the project. Kitimat LNG and Mitsubishi look forward to participation by other strategic partners to join this project.
"A partnership with Mitsubishi and other strategic parties will effectively move our project forward to the next stage of front-end engineering and design and a final investment decision," added Boulton.
Federal and Provincial Environmental Approvals Received
Kitimat LNG received Canadian Federal Government approval for its liquefaction terminal on December 10, 2008 and B.C. Provincial Government approval on January 9, 2009.
"Our federal and provincial approvals mark key milestones in our development of the Kitimat LNG terminal," said Boulton. "We appreciate the support we have received from the community and the First Nations, and we look forward to providing Kitimat and Northern B.C. with economic and business development opportunities."
The Kitimat LNG project will utilize natural gas transported via pipeline from Western Canada to the Kitimat LNG Terminal. At the terminal, the natural gas will be liquefied for export via ship to the growing Asian energy markets. The Kitimat LNG terminal will be the only LNG export facility in North America since the Alaskan LNG liquefaction plant began operation in 1969.