Chevron will operate the LNG terminal and pipeline, while its 50 percent partner Apache Corp (NYSE: APA) runs the acreage that will eventually fill it. Kitimat already has a license from Canadian regulators to export 10 million metric tons per year of LNG. Now armed with Chevron’s deep pockets, there’s potential for boosting capacity further.
The deal’s estimated price tag of $1.3 billion, for example, is a drop in the bucket compared to the more than $21 billion in cash Chevron has on its balance sheet.
On the other hand, the most recent projection of Kitimat’s ultimate cost is $15 billion. Those costs are likely to go higher by the time the project is completed later this decade.