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SINGAPORE (Reuters) - Encana Corp (ECA.TO) will take a final decision on the Kitimat LNG joint venture before the end of 2012, its chief executive officer said on Thursday, with the project's partners willing to offer up to 20 percent of the equity to potential gas buyers.
Selling equity to potential gas buyers is often used in LNG projects to lock in long-term customers and raise capital.
The joint-venture partners of the project, which include Apache Corp (APA.N) and EOG Resources (EOG.N), will be marketing supply from the plant collectively, Randy Eresman said on the sidelines of a conference in Singapore.
"We are looking for one or two anchors that we would allow to have equity in the facility as well," he said.
An investment decision on the Kitimat project had originally been expected in 2011
It was delayed because the joint-venture partners wanted to review the size of equity they would be willing to offer buyers, Encana spokesman Ryder McRitchie said.
"If we are saying that we are willing to do 20 percent and we're willing include land, then we had to go back and figure out which land we could include," he said.
If a 20 percent equity is agreed upon, Apache will lower its stake from 40 percent to 32 percent, with EOG Resources and Encana cutting its share from 30 percent to 24 percent each.
Kitimat LNG on Canada's West Coast is one of several North American gas export projects that aim to benefit from rising supplies due a boom in shale gas production.
Plentiful supplies have depressed North American gas prices to under $3 per million British thermal units (mmBtu), sparking interest from Asian markets, where prices for spot LNG are much higher at around $16 per mmBtu.
Royal Dutch Shell Plc (RDSa.L) and partners Korea Gas Corp (036460.KS), Mitsubishi Corp (8058.T) and China National Petroleum Corp CNPET.UL have also bought land for a potential LNG export terminal at Kitimat.
Progress Energy Resources Corp (PRQ.TO) and Malaysian joint-venture partner Petronas PETR.UL are carrying out a feasibility study for another project.
Reporting By Luke Pachymuthu; Editing by Michael Urquhart