Canadian natural gas supplier Encana walked away from a $5.4 billion deal with PetroChina Ltd. for development of shale natural gas has fallen through.
The companies ended talks after they failed to reach agreement on key aspects of the deal involving Encana’s Cutback Ridge assets in northeastern British Columbia, according to Encana.
The deal would have been the largest-ever Chinese investment in Canada’s energy sector, following a $4.65 billion investment in April 2010 by China Petroleum & Chemical Corp., or Sinopec, in Syncrude Canada Ltd., an operating oil sands project.
Encana, Canada’s biggest natural gas provider, did not give details on the discussions with PetroChina. But it said it now plans to seek joint venture partners for various parts of the project, including its undeveloped resources, pipeline and processing, to maximize the value of the resources.
“We look forward to discussing these very attractive opportunities with an array of potential investors in the upcoming months,” said Randy Eresman, Encana’s chief executive.
PetroChina’s interest in the project represented daily production of 255 million cubic feet of gas, proven reserves of 1 trillion cubic feet of natural gas and nearly 257,000 hectares (635,050 acres) of land.
Encana is also seeking investors for joint ventures involving assets outside Cutback Ridge, on undeveloped Horn River shale lands and in the Greater Sierra.