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Rio Tinto sells wharf and land options to LNG Canada

12th February 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Mining giant Rio Tinto on Wednesday said it had entered into an option agreement with LNG Canada, an international joint venture (JV), to acquire or lease a wharf and associated land at its port facility at Kitimat, British Columbia, Canada, where the JV is proposing to construct and operate a natural gas liquefaction plant and marine terminal export facility.

The location is where the proposed Enbridge Northern Gateway project would link Canada’s significant oil sands crude oil-producing province of Alberta, through British Columbia, with the Pacific Ocean, providing a 1 170 km, 525 000 bl/d gateway that would ship oil sands crude to new markets in Asia.

A federal joint review panel for the proposed Enbridge Northern Gateway project in December recommended that, subject to 209 required conditions, the federal Canadian government approve the pipeline project.

The agreement with the JV, comprising Shell Canada Energy, Phoenix Energy Holdings (an affiliate of Petro-China Investment (Hong Kong)), Kogas Canada LNG (an affiliate of Korea Gas) and Diamond LNG Canada (an affiliate of Mitsubishi Corporation), provides LNG Canada with a staged series of options payable against project milestones.

The financial arrangements were not disclosed.

"This is an excellent example of how we can generate meaningful value from our existing assets by selling options on port facilities to LNG Canada enabling it to share one of the best deep-water ports on the western seaboard of the country.

“This innovative approach will provide an expanded gateway for Canadian resources to worldwide markets, which has the potential to benefit the communities and economy of British Columbia,” Rio Tinto CEO Sam Walsh said.

LNG Canada VP Andy Calitz added that the LNG Canada project represented the best opportunity to bring the liquefied natural gas industry and its benefits to the people and communities of British Columbia.

Enbridge plans to construct two tanker berths, three condensate tanks and 16 oil storage tanks at its Kitimat marine terminal.

Edited by Creamer Media Reporter

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