Apache exit seen threatening Chevron’s Kitimat LNG project

|About: Chevron Corporation (CVX)|By:, SA News Editor

Chevron's (CVX -1.5%) plan to build a natural gas shipping terminal at Kitimat on Canada’s Pacific coast is threatened with the exit of its partner Apache (APA +2.2%), which said today it is exiting the project.

CVX probably won’t pursue the Kitimat LNG project on its own, given the cost overruns at its Gorgon project in Australia, Oppenheimer's Fadel Gheit says; the cost to build Gorgon, where CVX has Exxon for a partner, surged to $54B from expectations of $37B in 2009.

CVX still may attract a partner with experience developing gas and contacts in the market that missed the first wave of investment in Canada.