HONG KONG—The Chinese state-owned oil firm that bought Canadian energy producer Nexen Inc. for $15.1-billion earlier this year is throwing its hat in the British Columbia liquefied natural gas (LNG) ring.
China National Offshore Oil Corp. Ltd. (CNOOC) announced that Nexen has entered into an agreement with the B.C. government to “examine the viability” of building an LNG plant and export terminal near Prince Rupert, B.C.
The agreement with the B.C. Ministry of Forests, Lands and Natural Resource Operations gives Nexen and its joint venture partners JGC Corp. and INPEX Corp., both of Japan, the rights to pursue long-term access to Crown land near Grassy Point, northeast of Prince Rupert.
“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 release.
“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, CNOOC said the decision to go ahead 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.
“Throughout the planning process, we’ll also examine the steps we can take to help the (B.C. government) 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.”