Encana, PetroChina form partnership to develop natural gas in Alberta

CALGARY – Encana Corp. (TSX:ECA) and a Chinese partner have agreed to explore and develop shale natural gas in Alberta together.

A subsidiary of state-owned PetroChina will invest $2.18 billion for a 49.9 per cent interest in about 180,000 hectares Encana has in the emerging Duvernay formation.

Encana and PetroChina began working on another natural gas joint venture in 2010, but abandoned it a year later after the two couldn’t agree on how the asset would be operated.

Encana will remain the operator of the Duvernay joint venture, which will see the partners together spend $4 billion on drilling, completion and processing facilities over the next four years.

Last week Ottawa approved another Chinese company’s $15.1-billion takeover of Calgary-based Nexen Inc., but said future acquisitions of oilsands producers will only be allowed under exceptional circumstances from now on.

Because PetroChina is taking a minority interest in the Duvernay lands, it won’t be subject to the same federal review the Nexen deal was.