Apache execs outline future plans for upstream Horn River partnership with Chevron
Minutes of a Special Regional Council Meeting April 25th, 2013
Mayor Streeper welcomed the Apache delegation; Tim Wall, President, Kitimat Upstream, Apache; Rob Spitzer, Executive Vice President, Kitimat Upstream, Apache; Natalie Poole-Moffatt, Head, Public & Government Affairs, Apache; Kathryn Ross, Sr. Aboriginal Affairs Representative, Apache; and Honourable Jay Hill to Fort Nelson and explained the recently signed Infrastructure Development Contribution Agreement between the Northern Rockies Regional Municipality and the BC Government. Streeper said he was appreciative of the support the Canadian Association of Petroleum Producers (CAPP) had given them in the negotiations process.
Mr Wall congratulated council on achieving a significant agreement for infrastructure funding.
Mayor Streeper inquired if the delegation required the meeting to be moved InCamera. Mr Wall stated that, as no confidential information would be shared, the meeting could remain public. He informed Regional Council that Apache had recently partnered with Chevron for the development of a Liquefied Natural Gas (LNG) production facility, replacing Encana and EOG as partners. Chevron was identified as an excellent partner with significant resources around the world.
It was suggested that a meeting be set up to introduce Chevron to Regional Council. Mr Wall clarified that Chevron would be dealing with the engineering of the LNG facility while Apache would be responsible for the upstream assets. Mayor Streeper asked when Apache was expecting to increase activity in the Northern Rockies. Mr Wall replied that currently funding was being sought from the company’s board of directors, but work will be beginning in the Liard Basin soon. Mr Spitzer further clarified that work will be undertaken in the Liard in the upcoming winter, and that lots of work will be required prior to a final investment decision.
A discussion ensued about the length of time it will take to get the facility operational. Mr Wall estimated that it would take approximately five years following a final investment decision to bring an LNG facility online. However, he noted that there will be a considerable amount of exploration and development upstream prior in those five years.
Mayor Streeper encouraged Apache to increase its local hiring practices. Mr Wall noted that the new infrastructure agreement will assist Apache and other companies in attracting and keeping employees in the Northern Rockies. Mayor Streeper inquired about the issues with pricing gas for the Asian markets.
Mr Wall noted that negotiations are ongoing with Chinese and Japanese buyers, and that these buyers are trying to negotiate cheaper gas. It was stated that countries such as Japan are concerned about higher gas prices negatively impacting their economies. Continued on page 7
APACHE MEETS COUNCIL
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Fortunately, required agreements are beginning to be signed, and it is hoped that more will follow. A discussion was had about the costs to transport natural gas to Asia, and it was noted that India gas prices were too low to make it a viable market for Canadian gas. Mr Wall suggested that Canada faces costs similar (if not slightly lower) to Australia in shipping LNG to Asia.
Mayor Streeper noted that Regional Council had supported CAPP’s request to have LNG facilities taxed as manufacturing facilities to further lower costs.
Mr Wall thanked Council for this support and expressed disappointment that the initiative failed due to the political climate at the time.
Mr Spitzer inquired about the current local hiring processes in the Northern Rockies. Mayor Streeper noted that they had improved dramatically over the past three years, noting that there is now less reliance on Alberta workers.
A discussion ensued about the reasons for this shift. Apache’s recognition of the ISN safety standards was highlighted as one con tributing factor.
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