Chevron will buy a 50 percent stake in the Kitimat liquefied natural gas project in Canada's British Columbia from EOG Resources and Encana to tap into rising demand from Asia.
The Kitimat project, which has a license from the Canadian National Energy Board to export 10 million tons of LNG per year, is one of several North American gas export projects that aim to benefit from rising supplies from shale fields.
After the deal, Chevron and Apache each will hold 50 percent stakes in the project and the associated Pacific Trail Pipeline. Chevron Canada will operate the LNG plant.
San Ramon-based Chevron said it will buy a 50 percent stake in about 644,000 acres of petroleum and natural gas rights in the Horn River and Liard Basins in British Columbia from Apache.
"It (Kitmat) is ideally situated to meet rapidly growing demand for reliable, secure, and cleaner-burning fuels in Asia, which are projected to approximately double from current levels by 2025," said George Kirkland, vice chairman, Chevron.
Encana said the stake sale was consistent with its plan to focus on its core business and that the deal will reduce its future capital commitments.
In September, an Apache executive said its partners in the Kitimat LNG export project were looking to sell about 20 percent of their stake.