|
Encana seeking Asian partners Gas-weighted US, Canadian properties have natural gas liquids, oil potential; Kitimat partners negotiating offtake agreements Gary Park For Petroleum News
Encana is speeding up its search for partners to developing languishing gas-weighted properties in the United States and Canada, giving high priority to the Kitimat LNG project in British Columbia.
Speaking at an LNG conference in Singapore in late March, Chief Executive Officer Randy Eresman also said his company is looking for a single partner to develop leases in the Collingwood shale, Tuscaloosa marine shale, Mississippi Lime and Eaglebine (wells targeting both the Eagle Ford and Woodbine shales) in the U.S.
All of those properties have natural gas liquids and oil potential and are in the early stages of exploration and development.
“One of the things we’ve been trying to do is to get more liquids, particularly oil, in our portfolio,” Eresman told reporters. “But because of the high initial cost, we think we might be best to reduce our risk to accelerate the point of commercialization by bringing in another party.”
He said the partners in Kitimat — operator Apache with 40 percent and Encana and EOG Resources with 30 percent each — are negotiating offtake agreements and are prepared to offer up to 20 percent stakes to one or two anchor buyers.
A new ownership deal would see the partners jointly contribute equity to the export terminal, a pipeline and the development of the Horn River basin in northeastern British Columbia.
As many as six buyers Eresman said the talks currently involve as many as six buyers to secure long-term sales contracts to help finance the liquefaction and export facility at Kitimat on the northern British Columbia coast.
The objective is to have offtake contracts in place for a significant portion of the projects volumes — currently targeting two trains of 700 million cubic feet per day each — allowing a final investment decision later this year, with the first LNG exports scheduled for late 2015 or early 2016, he said.
The partners are agreed that they will not make final investment decision until they have at least 80 percent of the LNG volumes under long-term arrangements, he said.
Of the U.S. shale prospects, Eresman said he would like to see a partnership comparable to Devon Energy’s recent deal to give China’s Sinopec a one-third interest in five developing fields for US$2.2 billion.
He indicated a process could be launched within the next month.
Encana’s stake in northern Alberta’s Duvernay shale, an early-stage gas liquids play, could also be part of the offering, Eresman said.
FirstEnergy Capital analyst Michael Dunn estimated Encana could extract about US$2 billion for its offering, adding to its recent C$2.9 billion deal to transfer 40 percent of its Cutbank Ridge gas field in British Columbia to Japan’s Mitsubishi.
| 