Liquified Natural Gas | Northwest Coast Energy News

BC NDP formally opposes Northern Gateway in letter to Joint Review Panel

The British Columbia New Democratic Party has written to the Northern Gateway Joint Review panel formally opposing the controversial pipeline project, while at the same time supporting the Kitimat LNG projects, as long as there are strong environmental controls on those projects.

A long letter from NDP leader Adrian Dix to the panel concludes by saying

as the Official Opposition, we have carefully weighed the risks and benefits of the NGP to British Columbia, and to Canada. After much consideration and consultation, we have come to the conclusion that the risks of this project far outweigh its benefits. We believe that the NGP will cause significant adverse economic and environmental effects and is not in the public interest. Therefore the NGP should not be permitted to proceed.

The letter also calls on the federal government to legislate a permanent ban on tankers for the west coast. The letter goes over the history of the Exxon Valdez spill

Eight of 11 cargo tanks were punctured, releasing about 258,000 barrels of crude oil, most of which was lost in the first eight hours. There were widespread ecological and economic impacts….To this day, vital shore habitats remain contaminated, the herring fishery has been closed for 15 seasons since the spill, and herring are not considered recovered. The clean-up costs alone are estimated at $3.7 billion…Wildlife and natural resource damages range from $8.5 billion to as high as $127 billion…. Related to the economic hardship felt by families and communities, a wave of social problems followed – alcoholism, high divorce rates and even suicides swept through the Sound’s small towns….

We simply cannot let this happen in British Columbia: the risk is just too great. Therefore, we are calling on the federal government to legislate a permanent moratorium on oil tankers and oil drilling activity on B.C.’s north coast to ensure the ecological integrity and economic and social vitality of the lands and waters of this unique region.

The letter also takes Premeir Christy Clark to task for not taking a stand on the Northern Gateway Issue

The Government of British Columbia agreed to the Joint Review Panel (JRP) process, limiting its ability to give voice to B.C.’s interests. In addition, the Province did not seek government participant status and has failed to exercise its intervenor status to fully represent the interests of British Columbians.

We note that other government agencies including an Alberta municipality, the Province of Alberta and Alberta’s Transportation Ministry, as well as the federal Department of Indian and Northern Affairs, Department of Justice, Environment Canada, Fisheries and Oceans Canada, Natural Resources Canada and Transport Canada have registered as government participants in the JRP.

We also note that the Union of British Columbia Municipalities, and a number of local
governments have passed motions opposing the NGP. These include: the Village of Queen Charlotte, Sandspit, Masset, Port Clements, Prince Rupert, Terrace and Smithers.

As the Official Opposition, we take our responsibility to represent and to protect the interests of British Columbia and British Columbians seriously. We have listened to the concerns and diverse perspectives of constituents throughout the province and we have met with stakeholders and experts about the NGP.

The letter also expresses concern about the fairness of the Joint Review Process

Four New Democrat MLAs are actively participating in the JRP, as intervenors or as presenters. Three of these MLAs represent constituencies that will be directly impacted if the NGP proceeds. The fourth MLA is our environment critic. All of them, like the thousands of other British Columbians who are participating in the JRP, are doing so in good faith.

We are very troubled by statements of the Prime Minister and Minister of Natural Resources that have caused several commentators and JRP participants to question the objectivity of the process and ask if its outcome is predetermined.

Dix is quick to point out that the New Democrats are not against sustainable economic development.

The importance of sustainable economic development International trade and responsible resource extraction are essential to B.C. and Canada’s economy.

International trade creates good-paying jobs and vital communities. To this end, we are committed to building on our tradition of further developing trade relations with China and other Asia Pacific markets to build a strong B.C. economy.

Further, we have been clear about our support for the Kitimat liquefied natural gas project while emphasizing it comes with the serious responsibility to ensure strong environmental protections. We acknowledge that all resource development and extraction has inherent risks.

Other points in the NDP letter were:

The tanker traffic to ship Alberta oil to Asian markets will require lifting of the current tanker moratorium and the Tanker Exclusion Zone, and will put the British Columbia coastline at serious risk of devastating environmental and economic damage from potential oil spills;The NGP will traverse remote and highly valued areas of B.C., and will cross almost 800 streams. The risk of spills from the proposed pipeline will put these valuable
environments and species, such as salmon, at risk;The impact of an oil leak or spill would be most severely felt by First Nation
communities. As has been affirmed by the Supreme Court of Canada, First Nations must be consulted effectively and be respected on a government-to-government level;• The greenhouse gas emissions generated by NGP-related oil sands development will
contribute to the economic, social, and environmental costs of climate change;
The NGP provides few long-term and sustainable economic benefits for British
Columbia, while shipping raw bitumen forgoes important value-added economic
development opportunities involving upgrading and refining the oil in Canada;• The NGP is forecast to increase Canadian oil prices for Canadian consumers.

NDP BC news release

BC NDP caucus letter to Joint Review Panel (pdf)

NDP BC backgrounder on the Northern Gateway (pdf)

BC approves Pacific Trails Pipeline amendments

: A couple from Vancouver, who refused to give their names, unfurl an anti-Pacific Trails Pipeline banner at the British Columbia legislature in Victoria, Sunday, April 15, 2012. The man said he against all pipelines and that he was supporting the Wet’suwet’en First Nation. About 1,000 people marched through downtown Victoria to oppose the Enbridge Northern Gateway pipeline and coastal tanker traffic. (Robin Rowland/Northwest Coast Energy News)

The BC Environmental Assessment Office has approved an application to increase the capacity of the proposed 463 kilometre Pacific Trails Pipeline from the Summit Creek natural gas hub near Prince George to Kitimat.

The $1 billion pipeline project is crucial to the success of the KM LNG liquified natural gas export terminal at Kitimat, a partnership of Apache Corp., Ecana and EOG Resources.

The main thrust of the application was to increase the capacity of the pipeline to 1066.8 mm (42 inch) from the originally proposed 914 mm (36 inch). Pacific Trails will change the location of pump stations since the original proposal was for an import pipeline while now it is for export. There are also minor changes.

The proposal was generally considered pro forma since the main environmental review was completed under the original application approval in 2008 and the BC government was only considering the changes proposed by PTP.

The government report says officials were convinced that Pacific Trails would be able to handle problems with increased traffic and any potential risk involved in drilling under watercourses.

The Haisla submitted a number of technical questions about the impact of the larger pipes. While the BC Assessment office noted in its report that the Pacific Trails Pipeline is generally outside Haisla traditional territory, it is clear from the documentation that one of the Haisla concerns are any impacts on the Kitimat River watershed, as the questions concern the Stuart and Endako Rivers, the Morice and Gosnell Creeks and Weedene and Little Wedeene Rivers. The EAO ruled that the Haisla questions were outside the scope of the amendment or should be addressed in the “permitting process.”

Some Wet’suwet’en houses have been vocal in their opposition to the Pacific Trails Pipeline crossing their traditional territory, The Office of the Wet’suwet’en filed a strong objection to certain parts of the plan.

Given that the Minister of Natural Resources Joe Oliver and the federal government are now working to fast tracking all major resource projects, a comment from David de Wit, Wet’suwet’en natural resources manager is significant:

Fast tracking projects may result in overlooking important details [that] can have detrimental consequences. It is important to point out that the diligence required post-certification to ensure that impacts and effects on important resources are prevented or avoided is not satisfactory. This leaves the burden and legacy of any impacts to be borne by the Wet’suwet’en.

The letter goes on

We have invested considerable time and resources in the BC EAO review only to find that the level of detail required pre-certification leaves far too many unanswered questions critical for ensuring environmental effects and identification of potential infringements to our Title and associated rights from the project are avoided or minimized.

The EAO responded by saying the issues were covered by the original assessment and through the Oil and Gas Commission permit process. The letter from the Wet’suwet’en was, however, passed on to the Executive Director for further consideration

The Pacific Trials Pipeline, also known as the the Summit-to Kitimat pipeline will supply the Kitimat LNG project, a venture of the KM LNG partners, Apache Corp., Encana Corp., Apache Canada and EOG Resources. The $4.5-billion LNG terminal and facility will likely be operational by 2015, depending on how long it takes for the partners to line up Asian buyers.

Documents

BC Environmental Assessment office ruling on Pacific Trails Pipeline (pdf)

Wet’suwet’en submission to the BC EAO (pdf)

Apache posts job for Kitimat LNG construction manager

The Apache Corporation website has a posting for a construction manager for the Kitimat LNG project.

The posting says the job will initially based in Houston, Texas, with the manager coming to Kitimat sometime in the future.

The posting calls for the manager to provide an overall construction plan, co-ordinate and control the construction project from inception to completion aimed at meeting the Project’s requirements in order to produce a functionally and financially viable safe project that will be completed on time within the authorized budget and to the required quality standards.

Some of the job requirements give hints of the project to come:

Previous LNG Project experience including construction
Experience of modular and stick built construction
Working knowledge of safety system and management to maintain world class safety performance
Working knowledge environment system and management to maintain world class environmental performance
Knowledge of logistics in remote sites
Knowledge of heavy haul and lift works
Proven ability with advanced project management principles
Proven ability with people management
Experience in Canadian labor law and have deep experience working with unionized labor
Experience in working through cold weather climates

The site also has a posting for a Contracts and Procurement Manager.

Both postings expire on May 2, 2012.

Although Apache and its partners, Encana and EOG Resources now say that they have postponed the final go-ahead decision on the KM LNG project until the fourth quarter of 2012, as negotiations continue with Asian natural gas customers, the postings are indication that the project is progressing.

Reports say Shell near deal for Kitimat LNG project, as Oliver approves the BC LNG

The Minister of Natural Resources, Joe Oliver, has confirmed the approval of the 20 year export licence for the BC LNG Export Cooperative. The National Energy Board had approved the licence in February.

Earlier the government had also approved the export for the KM LNG project.

In a statement, Oliver said, “This export licence is another example of our Government’s commitment to diversifying our energy export markets and strengthening our trading partnership with Asia. Canada is a safe, responsible, and reliable supplier of energy contributing to global energy security.”

“Canada is well positioned to grow as a global energy superpower. Projects such as this will show the world that we are serious about getting our energy resources to market.”

The liquefied natural gas facility would be located on the west bank of the Douglas Channel at small cove near Kitimat. BC LNG Export Co-operative intends to ship up to 1.8 million tonnes of liquefied natural gas annually to markets in Asia.

Natural gas would be transported to the proposed Douglas Channel terminal on the existing Pacific Northern Gas Pipeline and potentially on the proposed Pacific Trail Pipeline. The proposed liquefied natural gas facility is undergoing an environmental assessment in accordance with the Canadian Environmental Assessment Act. The initial phase of the facility is expected to be in operation by late 2013 or early 2014 and, if it proceeds, would represent the very first liquefied natural gas exports from Canada.

Meanwhile, Reuters quoting the Japanese Nikkei, reported that Royal Dutch Shell together with Mitsubishi Corp, China National Petroleum Corp and Korea Gas Corp are in the final stages of negotiations to build a US$12.35-billion liquefied natural gas (LNG) terminal at Kitimat.
The companies will ship gas from their Canadian fields for the project and expect to begin production around 2020 at an annual rate of 12 million tons, Nikkei reported.

Nikkei said a broad agreement is expected as early as this month, after which the four companies will start seeking approval for the project.

Shell brought the old Methanex site and marine terminal in Kitimat last fall.

Alberta Oil magazine describes Kitimat LNG projects as high stakes poker

It looks like the Chinese curse (and journalist’s blessing) “May you live in interesting times,” has come to Kitimat, especially when it comes to selling LNG to Asia.

In the past months the world liquified natural gas market has become more volatile with increased competition across the globe and, in some cases, political factors adding to the molecule mix.

In the past few days, Alberta Oil magazine has published a series of articles on the Kitimat LNG projects, describing the projects as a high stakes poker game.

The point is that the potential Asian buyers for BC (and US) liquified natural gas want a secure supply and they’re not sure what is going on on this side of the Pacific.

That’s apparently why the first project, KM LNG, has put off the final go ahead project from the first quarter of 2012, as originally expected, to the now likely the fourth quarter of 2012.

That has left a lot of uncertainty in town, despite assurances from two of the KM LNG partners, Apache Corporation and EOG Resources that they are optimistic that there will be a deal with Asian gas buyers, even if it means Asian equity in the KM LNG project.

That uncertainty in Kitimat has led to widespread rumours, none substantiated, that the three proposed projects, by KM LNG, by the Houston-Haisla BC LNG partnership and Shell, may be consolidated in one way or another.

At Kitimat council on Monday, April 2, Mayor Joanne Monaghan said “There has been a rumour around recently that Apache is stopping their working for a year and I talked to the CEO, Tim Wall, yesterday and he assured me that that was not true.”

Work is continuing on the KM LNG site at Bish Cove.

This morning, April 5, 2012, Alberta Oil reported that EOG Resources boss still bullish on Kitimat LNG, quoting a company called Bernstein Research that met with EOG’s top executive, CEO Mark Papa, who told Bernstein that EOG considers its 30 per cent holding in KM LNG as a “core holding.”

In a Thursday research note, Bernstein’s Bob Brackett says EOG is willing to sell some of its stake in the Kitimat project to a buyer (likely of the Asian persuasion) looking for equity in the upstream portion of project. “EOG expects to dilute a portion of its stake for that purpose,” Brackett writes.

A day earlier, Alberta Oil reported in Global LNG players jockey for space on a crowded field noting that Australia’s LNG megaprojects are facing competition from North America and cost inflation as the number of projects increase. At the same, US LNG projects are trapped in the current mire of US politics, with many politicians wary of the energy-starved US exporting natural gas.

In Apache Canada makes global push amid fierce competition, the article that uses the poker analogy, the magazine quotes Asish Mohanty, senior research analyst, global LNG, with Wood Mackenzie

Kitimat is due to start pumping out five million tonnes of LNG by 2015, widely viewed as a market “sweet spot” because it beats a number of major Australian projects – among them Shell’s massive Prelude endeavor – into production. “It’s a bit of a race,” Mohanty at Wood Mackenzie says. “The general impression in the industry is that before these Australasian projects start up it’s going to be a sellers’ market.”

Mohanty also looks at the problem of cost inflation and limited resources, a problem Kitimat already faces with not only the three proposed LNG projects but RTA’s Kitimat Modernization Project.

Companies that specialize in engineering, procurement and construction of liquefaction facilities number fewer than 10 internationally, Mohanty says. He expects many of them will be kept busy by construction of several LNG projects underway in northwest Australia, including ongoing work at the massive Gorgon plant at Barrow Island. The Chevron-led venture is due to begin pumping out 15 million tonnes of LNG annually by 2014-15. “All of these are massive projects,” the analyst says. “What that means is order books are pretty full. There is a scarcity of resources in places like Australia right now.”

The shortfall could potentially squeeze Canadian LNG forays. “The fact that most of the B.C. facilities are going to be ‘green-field’ will not make it easy for them to meet a timeline compared to a lot of others.”

Related CBC News Mackenzie Valley pipeline funding reduced

Enbridge calls National Post story on PetroChina building Northern Gateway “speculation”

Updated

Enbridge late Wednesday, March 28, 2012, issued a statement saying that a story in the National Post/Financial Post that PetroChina could bid to build the Northern Gateway pipeline is “speculation.”

In PetroChina bids to help build $5.5-billion Northern Gateway pipeline columnist Claudia Cattaneo reported that:

Chinese investment in Canada’s energy sector could move to a new level if PetroChina wins a bid to build the controversial Northern Gateway oil sands pipeline.

The largest of China’s three state-controlled oil companies has expressed an interest in building the $5.5-billion project across the northern Canadian Rockies and is considering purchasing an equity stake, said Pat Daniel, president and CEO of proponent Enbridge Inc.

“They have made the point to us that they are very qualified in building pipelines, and we will take that into consideration when we are looking for contractors,” Mr. Daniel said in an interview. “It’s an open bid process. They are a very big organization, they build a lot of pipelines, and they would love to be involved from what they have told me.”

Within hours, Enbridge Northern Gateway issued its own statement:

To speculate at this time about who might be contracted to build a project that has yet to receive regulatory approval is premature in the extreme.

Construction of Northern Gateway would be through an open bid process, and to be successful any bid would have to meet Enbridge’s stringent requirements and meet all federal and provincial employment standards. Enbridge is firmly committed to hiring as many local people as possible to build and operate Northern Gateway and is not anticipating bringing in overseas workers to construct or operate the project.

“British Columbians and Albertans deserve to know that providing local employment is a top priority for Enbridge Northern Gateway,” said Janet Holder, Executive Vice-President of Western Access and the senior executive in charge of the pipeline project. “Ensuring a local workforce is skilled and work-ready in order to fully participate in, and benefit from, the economic benefits associated with the project is a priority for Northern Gateway.”

The Financial Post report says the Chinese company stands a good chance of presenting a competitive bid, but it is likely that Chinese construction of a major Canadian energy project would increase anxiety among Canadians already worried about China’s expanding ownership of Canadian resources.

While there is a labour shortage in the energy sector at the moment, the Financial Post says Canada could use could use a hand from an experienced Chinese oil company, but turning over construction to PetroChina could mean fewer construction jobs in B.C., “where Northern Gateway is a hard sell because of perceptions the province would bear all the risk of a spill, while the rewards would go primarily to Alberta’s oil sands sector.”

The Enbridge statement also says:

Northern Gateway will shape its hiring and procurement policies so that contractors and sub-contractors working on the pipeline and the proposed marine terminal maximize local hiring and training opportunities, particularly for Aboriginal people – who are expected to comprise approximately 15% of regional construction employment.

An education and training fund of $1.5 million has recently been developed by Northern Gateway. The fund will support flexible community based training associated with the pipeline construction.

Pacific Trails Pipeline holds community meetings

Pacific Trails Pipeline meeting — Hatha Callis, left, of Progressive Ventures Construction, discusses contracting possibilities with the staff of the Pacific Trails Pipeline at a community meeting in Terrace, BC, March 1, 2012 (Robin Rowland/Northwest Coast Energy News)

Pacific Trails, which has proposed to build a natural gas pipeline from Summit Lake, near Prince George, to Kitimat, held four community meetings in Vanderhoof, Burns Lake, Houston and Terrace, to discuss changes to a plan for the pipeline that was approved the BC Environmental Assessment Office in 2008.

Paul Wyke, a spokesman for Apache Corp., one of the main investors in the Kitimat LNG project as well as the Pacific Trails Pipeline, said the companies considered the meetings successful. About a dozen people showed up in Vanderhoof and Burns Lake and about 25 to 30 in Terrace and Houston, perhaps an indication of the lack of controversy, so far, for the PTP, which will follow roughly the same route as the Enbridge Northern Gateway pipeline. Apache and Pacific Trails also took part in a job fair on February 10 in Burns Lake, the town hard hit when a huge explosion flattened the Babine Forest Products sawmill on January 20, killing two, injuring 19 and left about 250 workers jobless.

About half the people showing up at the meetings were interested in job or contracting opportunities while the rest were concerned about environmental issues.

Nathan Hagan-Braun, project assessment manager for the BC Environmental Assessment Office, who also attended the community meetings, said that a decision on approval of the amendments to the PTP plans will likely come in May.

PTP says that once the project adjustments are approved, logging and clearing is scheduled for the summer of 2012, pipeline construction in 2013 and 2014, with the pipeline going into operation in 2015.

More pipeline debate coming to the Northwest: Changes to the Pacific Trails natural gas Pipeline

Pacific Trail Pipelines map — The Pacific Trails Pipeline map as of Feb. 2012. (PTP/BCEAO)

Another pipeline debate is about to open in the northwest. This time for changes to the Pacific Trails (natural gas) Pipeline, that will run from Summit Lake, just outside Prince George, to Kitimat.

Public information meetings will be held in Terrace, Houston, Burns Lake and Vanderhoof in the next couple of weeks.

The PTP runs entirely within British Columbia, and so comes under the jurisdiction of the Environmental Assessment Office of British Columbia. The application to build the PTP was filed in 2005 and approved in 2008 which means the process for the amendments will go much faster than the current Northern Gateway Joint Review hearings for the Enbridge twin bitumen/condenseate pipeline which are expected to last at least another eighteen months.

Pacific Trails is asking to

Change the location of the compressor station;
Establish two new temporary stockpile sites;
Make pipeline route modifications

The period for commenting on the Pacific Trails Pipeline amendments opens on February 27 and closes March 28. The public meeting on the changes to the compressor station were held in Summit Lake last September.

The documents filed with the BCEAO say that Pacific Trails Pipelines is in ongoing negotiations with First Nations where the PTP will cross their traditional territory.

The natural gas project has general support in northwestern BC, and the relations between First Nations and PTP, and Apache, the main backer of the Kitimat LNG project are much better than those with Enbridge. (The PTP would supply the liquified natural gas terminals in Kitimat)

Significantly, the documents show that the PTP is trying to enter separate negotiations with the Wet’suwet’en houses that are now objecting to the pipeline route through their traditional territory.

The filing says:

In addition, PTP is now consulting, or making all reasonable efforts to consult, with one of the 13 Wet’suwet’en Houses as a discrete entity. PTP was informed in February 2011 that Chief Knedebeas’s House, the Dark House, was no longer part of the Office of the Wet’suwet’en although the latter still maintains responsibility for the welfare of all Wet’suwet’en lands and resources. Consultation that took place prior to this year with the Office of the Wet’suwet’en included consultation with the Dark House. PTP has been diligent in seeking to consult with the Dark House since April 2011. The spokesperson for Chief Knedebeas of the Dark House, Freda Huson, states that she also represents a group called Unist’ot’en.

But it’s Enbridge that is the sticking point, and could bring controversy to this amendment request. The Wet’suwet’en houses that blockaded a PTP survey crew last fall said they were worried that the Northern Gateway pipeline follows roughly the same route as the PTP. The PTP application was filed and approved long before the controversy over the Enbridge Northern Gateway began to heat up.

One reason is that original approval was for a pipeline to import natural gas before the shale gas boom changed the energy industry. As PTP says in the application to change the compressor station.

When the original purpose of the PTP Project was to transport natural gas from an LNG import facility at Kitimat to the Spectra Energy Transmission pipeline facilities at Summit Lake, the design called for the installation of a mid-point compressor station to enable the required throughput of natural gas. This compressor station was sited at the hydraulic mid-point of the pipeline. The location of the compressor station in 2007 was south of Burns Lake and just east of Highway 35.

Now that the PTP Project is designed to move natural gas from Summit Lake to Kitimat, or east to west, a compressor station is required at Summit Lake rather than at the hydraulic mid-point of the pipeline. The new Summit Lake compressor station is required in order to increase the pressure of the natural gas from where it is sourced at the Spectra Energy Transmission pipeline facilities.

The EAO will hold open house meetings on the pipeline route changes from 4 pm to 8 pm at each location at

Monday, February 27, 2012
Nechako Senior Friendship Centre, 219
Victoria Street East
Vanderhoof, BC

Tuesday, February 28, 2012
Island Gospel Gymnasium
810 Highway #35
Burns Lake, BC

Wednesday, February 29, 2012
Houston Senior Centre
3250 – 14th Street W
Houston, BC

Thursday, March 1, 2012
Best Western Plus Terrace Inn
4553 Greig Avenue
Terrace, BC

The EAO says: Displays containing information on the proposed amendments will be available for public viewing. The EAO will be available to answer questions on the amendment process. The Proponent will be available to answer questions on the Project and proposed amendments.

The documents show there are route changes to the pipeline route along the Kitimat River, but those are considered “minor route adjustments” so no meetings are planned for Kitimat.

Documents

PTP meeting schedule

Complete filing documents from PTP are available on the BCEAO site here.

Pacific Trails Pipeline

Apache waiting for sales deals before final green light for Kitimat LNG

There was no announcement of a green light for the Kitimat LNG project in today’s conference call by Apache Corp. with market anaylsts and journalists.

Apache CEO G. Steven Farris told the call that negotiations with overseas (likely Asian) buyers are at an advanced stage.

“Frankly we’re somewhat past the polite introductions and that kind of stuff with respect to buyers,” he said. “We’re now in the throes of actual negotiations.”

While Apache has yet to commit to building the $5-billion plant at Bish Cove, south of Kitimat, construction work has continued all winter at the site.

Market analysts still expect Apache and its partners in KMLNG, Encana and EOG, to give the go ahead sometime in the first quarter of 2012.

In a news release issued before the call, Farris, said “Apache’s balanced portfolio and returns focus fueled an outstanding year in 2011, setting records for production, earnings, revenues, proved reserves and cash flow.”
The release went on to say:

In the fourth quarter, earnings totaled $1.2 billion or $2.98 per diluted share, up from $670 million or $1.77 per share in the prior-year period. Production totaled 759,000 boe per day, up 4 percent from the year-earlier quarter, and cash from operations before changes in operating assets and liabilities* totaled $2.7 billion, up from $2 billion in the year-earlier period. Apache reported fourth-quarter adjusted earnings* of $1.2 billion or $2.94 per share.

Apache’s oil and natural gas liquids production was 50 percent of total volume in 2011 but contributed nearly 80 percent of revenues because of the wide gap between global crude oil and North American natural gas prices. Apache’s results also benefited from the price differentials between oil prices in basins linked to the West Texas Intermediate benchmark and higher prices for oil produced in the Gulf of Mexico, Egypt, Australia and the North Sea that represents approximately 76 percent of its crude production.

Apache ended 2011 with proved reserves of 3 billion boe, up 1 percent from 2010. Apache’s 2011 production was 273 million boe (MMboe). The company added 422 MMboe, or 155 percent of production, through extensions, discoveries and acquisitions. Divestitures and revisions totaled 113 MMboe. Apache spent $9.1 billion on exploration, development and acquisitions capital, excluding asset retirement obligations and capitalized interest.*

During 2011, with the continued downward pressure on North American natural gas prices, Apache transitioned its North American drilling program to oily and liquids-rich targets in the Permian and Anadarko basins, the Gulf of Mexico and Canada.

Kitimat key to Canada’s future relationship with China, Asia Pacific Foundation says

An editorial published today by the president of the Asia Pacific Foundation of Canada says that the media concentrating on Prime Minister Stephen Harper’s trip to Beijing has it wrong, the key to the relationship between Canada and China is in Kitimat, not Beijing.

In the editorial, President’s View, Future of Canada-Asia Energy Relations in Kitimat , foundation president Yuen Pau Woo reflects on a recent visit to Kitimat where he met representatives of the First Nations, industry, and municipality.

Woo says: “Kitimat’s livelihood depends on trade with Asia and the community knows it.”

The editorial lists such projects as the Kitimat modernization porject at the Rio Tinto Alcan, KMLNG’s Kitimat LNG project, other proposed LNG projects, “sharply increased vessel traffic through the Douglas Channel” and, of course, the proposed Enbridge Northern Gateway pipline.

Woo’s key paragraph reads:

The future of Canada-Asia energy relations is not about Beijing; it is about Kitimat. It is in this remote coastal community that the confluence of Asia’s growing economic clout, Canada’s abundance of natural resources, the livelihoods and economic aspirations of First Nations, the challenge of supporting rural communities, and the pristine environment of the Canadian wilderness have created conditions that demand new forms of partnership for a sustainable future.

Woo says that “the Alcan Modernization Project and the Kitimat LNG Plant are excellent examples of community and First Nations consultation and collaboration that have so far yielded positive results,” without mentioning how long it took to come to those agreements; the decades of problems outlined by Haisla leaders before the Joint Review Panel, and that the current agreements are just the start to redress those problems.

On Northern Gateway, Woo concludes:

The challenges facing the Northern Gateway Pipeline project are of a different order of magnitude, but even on this most contentious of projects, I would not underestimate the capacity of stakeholders to find a uniquely Canadian solution that is based on mutual benefit, compromise, and the long-term good