(Adds details on LNG projects, analyst comment, updates stock price)
HOUSTON, July 31 (Reuters) - U.S. oil and gas company Apache Corp, under pressure from activist investor Jana Partners, said on Thursday it plans to sell interests in two liquefied natural gas (LNG) projects as it sharpens the focus on developing North American shale fields.
The move, a significant pullback from the LNG market, relieved investors worried about the potential project costs. Apache shares rose to their highest in more than two years.
Apache also reported that profits fell in the second quarter, but still topped expectations.
Apache said it intends to completely exit LNG projects - in which it partners with Chevron Corp - in Wheatstone in Australia and Kitimat in Canada. Apache is also evaluating international assets, including operations in Egypt and the United Kingdom, and exploring multiple opportunities, it said.
Jana, which disclosed in June it had a $1 billion stake in Apache, has urged the Houston company to exit the Canadian and Australian projects and focus on drilling onshore in the United States.
Over the last year, Apache has sold $10 billion worth of assets to focus its drilling on more profitable and predictable shale oil wells in places like the Permian Basin and the Eagle Ford in South Texas.
"Apache is really trying to focus on domestic oil production," said Brian Youngberg, an analyst at Edward Jones in St. Louis. "The question is for a company the size of Apache, do they need to be involved in big legacy LNG projects that need a lot of cash upfront."
The $15 billion Kitimat LNG project in British Columbia is the most advanced of the dozen or more LNG plants that have been proposed for Canada's Pacific coast, though rival projects by Malaysia's Petronas and Royal Dutch Shell Plc are gaining ground.
Originally proposed as a regasification facility for LNG imports, the Kitimat site has environmental approvals in hand. Early construction has begun, and plans for a pipeline from northern British Columbia's shale-gas fields to the facility are well underway and face limited opposition from Aboriginal groups.
For companies that want to supply the Asian market, taking a stake in the Kitimat facility could speed those plans.
NO INTEREST IN BOOSTING KITIMAT STAKE
Still, Kitimat has yet to get a final investment decision from Chevron and has been under review since the company bought into the project alongside Apache in December 2012.
It also needs to finalize LNG sales agreements.
Chevron has said publicly it was concerned about costs, given Kitimat's location in a remote part of British Columbia.
Chevron has said it has no interest in becoming sole owner in the Kitimat project, or even increasing its stake beyond 50 percent.
One source involved in LNG trade said Kitimat is struggling. Chevron was not immediately available to comment.
Apache also reported second-quarter profit fell to $505 million, or $1.31 per share, from $1.02 billion, or $2.54, in the same period a year earlier.
Excluding one-time items, Apache posted a profit of $1.67 per share. Analysts, on average, expected $1.65, according to Thomson Reuters I/B/E/S.
Apache shares jumped 2.2 percent to $103.58 in early afternoon trade.
(Additional reporting by Scott Haggett in Calgary, Ernest Scheyder in New York and Oleg Vukmanovic in Milan; Editing by Terry Wade and Jeffrey Benkoe)