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A liquefied natural gas terminal planned for the west coast of British Columbia has received its first show of producer support from Houston-based EOG Resources Inc., a big player in B.C.'s promising Horn River Basin.

Kitimat LNG said yesterday it has signed a memorandum of understanding with EOG to provide natural gas to a 700-million-cubic-feet-a-day LNG plant in the northern port city of Kitimat.

"It's a very significant step forward for us," Rosemary Boulton, president of the private Calgary-based LNG company, said in an interview. "We've had strong indications of interest from the market side. And this is our first producer that stepped up and has provided commitment to the project."

LNG is created by condensing natural gas into a liquid in ultracold temperatures. As a liquid, it can be loaded onto special tankers and transported by sea around the world, making a once regional commodity a global one, like crude oil.

The Kitimat terminal, slated to come into service toward the end of 2013, would allow natural gas producers in Western Canada to tap into lucrative Asian markets.

Companies such as Spain's Gas Natural have already agreed to buy the LNG that will be produced from the Kitimat plant. Discussions are under way with other buyers and suppliers, Kitimat LNG said.

Horn River, in the northeastern corner of British Columbia, is believed to hold several trillion cubic feet of natural gas in reservoirs trapped in shale rock. Industry players have said it has the potential to rival prolific plays like the Barnett formation in Texas and the Haynesville on the Louisiana-Texas border.

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