Chevron stands off with LNG buyers over pricing

[Petrovale]

http://business.financialpost.com/2013/0...s-at-risk/

CALGARY — Chevron Corp. is taking a hard line with Asian utilities and other potential buyers seeking cheaper prices on exports of liquefied natural gas from Canada’s West Coast, warning that unless sales are indexed to oil prices “the projects won’t get built.”

Chevron, the second-largest U.S. energy company, bought 50% of the Kitimat LNG project last year from Encana Corp. and the Canadian unit of EOG Resources Inc. for an undisclosed sum. As part of that deal, the San Ramon, Calif.-based oil major also scooped up a 50% stake in the Pacific Trails Pipeline, plus more than 300,000 net acres of prospective shale gas properties in northeastern British Columbia.

Chevron, via its Canadian subsidiary, joins Apache Canada Ltd. as a 50-50 partner in developing the Kitimat scheme, assuming the operator role in a project that has faced delays because of difficulties securing long-term sales contracts with buyers in Pacific markets.

[Palm]

Thanks Petro. Obviously costing and cost blowouts are fresh in the minds and wallets of the SM's. No deals for you on pricing until enough time has passed for costs to be one standardized to some point. Until then, pricing is what it is and buyers better buy into sources to help control costs and minimize prices.