Houston-based EOG Resources will acquire Galveston LNG, which owns 49% of the planned Kitimat liquefied natural gas (LNG) export terminal to be located at Bish Cove, British Columbia.

In January 2010, Apache Corporation entered into an agreement with Calgary-based Galveston’s wholly-owned subsidiary, Kitimat LNG, to acquire 51% of the Kitimat LNG project. Apache will be the operator of the project.

Planned capacity of the terminal is about 700 million cubic feet of natural gas per day or five million metric tons of LNG per year. Preliminary construction costs, currently estimated to be approximately CAD3bn, will be revised at the conclusion of front-end engineering and design.

Under the terms of the agreement, EOG’s offer to purchase the shares of Galveston is conditioned upon the achievement of certain commercial and regulatory milestones, EOG said.

Mark Papa, chairman and CEO of EOG, said: “EOG is pleased to partner with Apache in the development of this new market opportunity for natural gas from our Canadian operations. By combining our experience and resources, we are confident we can move this project to completion.”

Upon EOG’s acquisition of Galveston, EOG and Apache propose to construct, own and operate the LNG terminal near the Port of Kitimat. At the terminal, natural gas will be cooled and liquefied in preparation for export via ship to global markets.