CNOOC May Export Canadian LNG

CNOOC Ltd, China's dominant offshore oil and gas producer, is considering building a liquefied natural gas plant and terminal to export the fuel from Canada's Pacific coast to Asia.

Nexen Energy, CNOOC's wholly owned Canadian unit which it bought for US$15.1 billion earlier this year, has been awarded exclusive rights by the provincial government of British Columbia to proceed with the proposed project with two Japanese partners, CNOOC said yesterday.

The Aurora LNG project at Grassy Point, near the port city of Prince Rupert, is one of at least 10 proposed LNG plants on Canada's western coast. The Canadian government aims to transform the region into a major hub for LNG exports to challenge existing LNG hubs such as Australia and the Middle East.

"LNG export is the most attractive option for maximizing the value of our Canadian shale gas business," CNOOC Chief Executive Li Fanrong said in a statement. "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 purse this opportunity."

CNOOC said the project will proceed if the joint venture partners are satisfied with its financial attractiveness, which depends on construction costs, fiscal terms offered by the local government, and success in obtaining "acceptably priced" sales agreements.

CNOOC owns 60 percent of Aurora while Japan's Inpex Corp and JGC Corp split the remaining 40 percent.

CNOOC's acquisition of Nexen is China's largest overseas investment takeover.

Canadais eying the Asian markets where consumers pay a premium over prices amid surging demand.

 (china.org.cn, edited by Topco) ook -olX����st1:place w:st="on">Arctic.

Under a 1981 treaty, Norway has a right to take a 25 percent stake in the licenses.

It did so with the first two licenses Reykjavik awarded in January, to London-listed Faroe Petroleum and Canada's Ithaca Energy together with local Icelandic partners.

Chinais keen to find natural resources and the Arctic could hold some 90 billion barrels of oil equivalent according to the U.S. Geological Survey. In April it signed a free trade deal with Iceland, abolishing tariffs between the two.

Iceland, still recovering from the 2008 financial crisis that brought the country to its knees, is keen to develop its natural resources to help spur its economy.

There are no figures for how much oil and gas the area where the licenses lie could hold.

But the area off Norway's Jan Mayen island, geologically similar, could hold 566 million barrels of oil equivalent, according to a February survey by the Norwegian Petroleum Directorate. That is the equivalent of a sizeable North Sea field.

The Norwegian oil and energy ministry, which is taking the decision, declined to comment. A representative of CNOOC was not immediately available to comment.

 (reuters.com, edited by Topco)