At a news conference in London on Thursday, Shell’s chief executive Peter Voser confirmed the two companies had signed “binding agreements,” but neither side would disclose the price. Reports out of Asia pegged it at $1-billion.
Shell and CNPC - known as PetroChina - have partnered in projects around the world, including the Chang Bei tight gas play in China and the 2010, $3-billion purchase of Australia’s Arrow Energy, a coal-bed methane producer.
PetroChina is also a member of a Shell-led consortium that is pursuing a liquefied natural gas (LNG) project in Kitimat, B.C., to ship gas to premium-priced Asian markets.
Shell has extensive holdings in the Montney shale gas region of northeastern B.C., and the PetroChina deal covers only its wholly-owned properties. The Anglo-Dutch super-major has projected that the Groundbirch property could be producing more than 400 million cubic feet per day by 2014, and that the resource has the potential to support 1 billion cubic feet per day.
For PetroChina, the deal represents the latest foray into Canadian oil and gas industry, and comes as Prime Minister Stephen Harper prepares for his visit to Beijing next week, a trip aimed in part at attracting more Chinese investment to Canada.
All told, state-owned Chinese companies have invested $10-billion into Canadian oil and gas sector.
PetroChina’s proposed $5.4-billion investment in Encana Corp.’s (ECA-T19.450.583.07%) shale gas properties in British Columbia collapsed after the two sides disagreed on valuations.
Last month, the company agreed to acquire full ownership of the undeveloped MacKay River oil sands project from its joint venture partner, Athabasca Oil Sands Corp. The company had purchase 60 per cent of the property two years ago.
Original Article
Source: Globe
Author: shawn mccarthy
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