China Petroleum and Chemical Corporation (SNP) is discussing the purchase of a minor stake in Kitimat liquefied natural-gas (LNG) project with U.S. energy firm Apache Corp. (APA). Details relating to the purchase have not been disclosed. Moreover, Sinopec’s management has not sanctioned the investment yet. However, a source revealed that Sinopec’s stake investment will be utilized to fund the LNG project.
The Kitimat LNG development includes undeveloped shale assets covering roughly 644,000 acres of land, pipelines and a processing plant of LNG. Apache owns 50% of the project whereas Chevron Corporation holds the rest. Sinopec has been exploring expansion and acquisition opportunities offshore and abroad to reduce its exposure to mature domestic markets. However, competition from domestic and international peers, as well as the possibility of time-consuming government deregulation and internal company restructuring, make near-term progress difficult.