CNOOC starts LNG viability study in Canada

CNOOC Ltd, China's largest offshore oil and gas developer, announced on Wednesday that its wholly-owned subsidiary Nexen Energy ULC has entered into an exclusive agreement with the government of British Columbia, Canada, to examine the viability of constructing a liquefied natural gas plant and export terminal.

The project will be located at Grassy Point near Prince Rupert in British Columbia.

"LNG exports are the most attractive option for maximizing the value of our Canadian shale gas business," said Li Fanrong, chief executive officer of CNOOC.

"With robust financial capacity, a track record of efficient, innovative and responsible development and significant LNG expertise, Nexen and our joint venture partners are well positioned to pursue this opportunity."

In addition to assessing the suitability of the Grassy Point site, the decision to proceed with LNG development is subject to a variety of internal and external approvals.

"We have a long process ahead that includes a site viability review, a comprehensive environmental impact assessment and stakeholder consultation," said Kevin Reinhart, CEO of Nexen.

He said throughout the planning process, the company will also examine the steps it can take to help the province of British Columbia to realize its goal of creating a strong and competitive LNG industry that creates jobs, strengthens pan-Pacific trading relationships and delivers lasting social and economic benefits.

The agreement with the government of British Columbia, represented by the Ministry of Forests, Lands and Natural Resource Operations, grants Nexen and its joint venture partners INPEX Corp and JGC Corp, the exclusive rights to pursue long-term access to crown land at Grassy Point.

CNOOC acquired Canada-based Nexen in February for $15.1 billion, China's largest overseas acquisition.

According to the plan, Nexen will mainly focus on oil sand, shale gas and other unconventional energy businesses.