"The Kitimat LNG development is an attractive opportunity that is aligned with existing strategies and will drive additional long-term production growth and shareholder returns," Chevron vice-chairman George Kirkland said Monday.
"This investment grows our global LNG portfolio and builds upon our LNG construction, operations and marketing capabilities."
Liquefied natural gas is seen as a way to open up markets beyond the reach of the North American pipeline system. The gas can be cooled to a liquid state and loaded onto ships from terminals, such as the one planned for Kitimat, for transport to Asia or other markets.
Chevron Canada Ltd., a subsidiary of the U.S. energy giant, has agreed to buy out the stakes held by Calgary-based Encana Corp. and a subsidiary of EOG Resources, Inc. (NYSE:EOG), which each hold 30 per cent.
As part of an transaction with Chevron, U.S.-based Apache Corp., which holds the remaining 40 per cent stake, will increase its ownership of the plant and pipeline to 50 per cent.
Financial terms of the agreements were not immediately available.
The deal, which includes the Pacific Trails Pipelines project, will also see Chevron acquire properties in the Horn River Basin from Encana, EOG and Apache, and property in the Liard Basin from Apache.
Chevron will operate the LNG plant and pipeline, while Apache will operate the upstream assets.
The company brings to the project considerable expertise with several liquefied natural gas projects under development around the world.
In Australia, Chevron owns a 64.14 per cent stake in the Wheatstone Project under development on the West Pilbara coast.
As well, the company is developing the Gorgon project, one of the largest in the world, that will include an LNG plant on Barrow Island and a domestic gas plant in Western Australia.
Both Encana and EOG said they were selling their stakes in the project to focus on their core operations.
"Our main goal since we first acquired an interest in Kitimat LNG almost two years ago was to help ensure the progression of this project towards its development," Encana chief executive Randy Eresman said in a statement.
"While we are no longer a direct participant in this project, we continue to support LNG export as vital to diversifying markets for North American natural gas."
Apache called the deal a milestone for the project.
"With experience developing LNG projects, marketing expertise and financial wherewithal, Chevron is the preferred coventurer to join Kitimat LNG," Apache chairman and chief executive Steven Farris said in a statement.
"Apache has a proven record in finding and developing shale gas resources in Canada and is the logical operator for the upstream elements of the joint venture.
The proposed Kitimat LNG project is in the front-end engineering and design phase. The current plans call for two liquefaction trains, each with expected capacity of five million tons of liquefied natural gas per year.
In October 2011, the National Energy Board granted Kitimat LNG a 20-year export licence to serve international markets.
The project is one of several under development on the B.C. north coast.
A feasibility study into an LNG facility on Lelu Island near Prince Rupert, B.C., as been done by Petronas and Progress Energy Resources, work is now going ahead to determine timelines, costs and labour requirements.
Petronas recently acquired Progress and had said if the federal government approved the purchase it would look to build a larger plant than had first been considered.
Royal Dutch Shell PLC and three Asian partners — PetroChina, Mitsubishi Corp. and Korea Gas Corp. — have also announced plans to build a liquefied natural gas export terminal in Kitimat, B.C.
Another proposal called BC LNG, owned by the Haisla First Nation and Houston-based LNG Partners, expects its first shipment in 2014.