PetroChina to buy 20 % of Shell's Canadian Groundbirch shale gas project

Chinese state-owned petroleum giant PetroChina yesterday signed a deal to buy a 20-per cent stake in a shale gas project in Canada from Royal Dutch Shell, the latest in a series of deals entered to by the two energy giants.

PetroChina is the listed arm of state-owned China National Petroleum Corporation and is the world's second-most valuable oil and gas company after Exxon Mobil Corp.

PetroChina did not disclose the size of the deal, but citing market talk, Hong Kong-based publication FinanceAsia, yesterday said in a report that PetroChina was planning to buy a 20 -per cent stake in Shell's Groundbirch Project for more than $1 billion.

Located in British Columbia, the Groundbirch covers an area of around 777km and Shell has drilling rights in the larger Montney gas play. The gas is located in tight rock
formations about 2,500 metres below the surface.

The Groundbirch natural gas output is now 125 million cubic feet per day and has the potential to produce 1 billion cubic feet equivalents (bcfe) of natural gas per day. It has an estimated producing life of 40 years.

Beijing-based PetroChina said that it hopes to gain experience in the exploration and development of unconventional gas resources through this acquisition.