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Encana Corp [ECA 32.86 -0.04 (-0.12%) ] said on Wednesday it will sell half of a prolific British Columbia shale gas project to PetroChina [PTR 136.09 -1.05 (-0.77%) ] for C$5.4 billion ($5.4 billion) in the largest Chinese investment in a Canadian energy asset yet.
After nine months of talks, Encana, one of the North America's largest gas producers, and state-owned PetroChina agreed to form a 50-50 joint venture to develop the Cutbank Ridge lands in northeastern B.C.
The deal's value surpasses Sinopec $4.65 billion acquisition of ConocoPhillips' [COP 72.70 0.55 (+0.76%) ] stake in the Syncrude Canada oil sands venture last year as Chinese and other Asian energy companies intensified buying spree in Canada's oil patch.
Encana said the venture will let it accelerate development of its reserves while keeping a lid on capital investments at a time of weak natural gas prices.
What's the takeaway?
Although Canada's government blocked the BHP / Potash deal, Fast trader Jon Najarian doesn't expect any interference here. And Joe Terranova adds, "This is a joint venture so there should be no regulatory issue."
Also Terranova says the deal gives China "exposure to the physical gas reserve, something they sorely need."
After nine months of talks, Encana, one of the North America's largest gas producers, and state-owned PetroChina agreed to form a 50-50 joint venture to develop the Cutbank Ridge lands in northeastern B.C.
The deal's value surpasses Sinopec $4.65 billion acquisition of ConocoPhillips' [COP 72.70 0.55 (+0.76%) ] stake in the Syncrude Canada oil sands venture last year as Chinese and other Asian energy companies intensified buying spree in Canada's oil patch.
Encana said the venture will let it accelerate development of its reserves while keeping a lid on capital investments at a time of weak natural gas prices.
What's the takeaway?
Although Canada's government blocked the BHP / Potash deal, Fast trader Jon Najarian doesn't expect any interference here. And Joe Terranova adds, "This is a joint venture so there should be no regulatory issue."
Also Terranova says the deal gives China "exposure to the physical gas reserve, something they sorely need."