Feb 12 (Reuters) - Rio Tinto PLC said onWednesday it had reached an option agreement with LNG Canada toacquire or lease a wharf and associated land at its portfacility in northern British Columbia.
LNG Canada, a joint venture between Royal Dutch Shell PLC, Mitsubishi Corp, Korea Gas Corp and PetroChina Co Ltd, is developing a natural gasliquefaction plant and export terminal in Kitimat, some 750 kms(465 miles) up the Pacific coast from Vancouver.
The agreement, which will give LNG Canada access to RioTinto's deep water port in Kitimat, provides the group with astaged series of options payable against project milestones. Riodid not disclose the financial terms of the deal, saying theywere "commercially confidential."
The LNG Canada project is just one of about a dozen exportterminals proposed for British Columbia's Pacific Coast ascompanies race to build the infrastructure needed to get cheapCanadian gas to booming markets in Asia.
While top global energy players like Shell, Chevron Corp and Malaysia's Petronas have already spenthundreds of millions on their Canadian projects, none have madea final investment decision.
That could change soon, as British Columbia is set torelease the general framework for its proposed LNG tax regimewith its provincial budget on Tuesday, removing a key hurdleholding companies back from those investment decisions.
LNG Canada, which has an export permit and is undergoing anenvironmental review, has long been considered a front-runner,though expectations were cooled in recent weeks after Shellwarned it would cut spending companywide and streamline itsoperations following a major profit warning.
A final investment decision on the LNG Canada project is notexpected until next year.
Rio Tinto (RIO)
