Apache Corporation Signs MOU

Apache Corporation Signs MOU

August 12, 2009 - 6:55am

Kitimat LNG Inks MOU with Apache Corporation

Leading natural gas producer moves forward on long-term supply agreement and holds option for equity investment in proposed terminal

CALGARY, August 10, 2009–Kitimat LNG Inc. announced today that it has signed a memorandum of understanding (MOU) with Apache Corporation to supply natural gas to Kitimat LNG’s proposed liquefied natural gas (LNG) export terminal.

The MOU sets a framework Kitimat and Apache to negotiate a definitive agreement to supply 200 million to 300 million cubic feet (MMcf) of natural gas feedstock to the terminal, which has a planned capacity of 700 MMcf per day. Apache also obtained an option to purchase an equity stake in the Kitimat LNG terminal.

“We are very pleased to welcome an industry leader such as Apache to our growing team of exceptional project partners,” said Rosemary Boulton, President of Kitimat LNG. “The participation of companies such as Korea Gas Corporation (KOGAS), GAS NATURAL, EOG Resources Canada and Apache gives our project strong momentum and reinforces the fundamental strength of our business strategy.”

As natural gas supply and reserves continue to increase in North America, Kitimat LNG’s terminal will provide producers in Canada such as Apache with secure access to key worldwide markets.

Apache recently released drilling results from the Horn River shale area in northeast British Columbia that strengthened earlier estimates that individual horizontal wells in the area potentially can recover 10 billion cubic feet of natural gas. Apache holds about 210,000 net acres in Horn River. Exploration and development activity in Apache’s Canadian region is concentrated in the provinces of Alberta, British Columbia, and Saskatchewan. The region comprises 4.9 million net acres and approximately 22 percent of Apache’s estimated proved reserves.

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