CNOOC Limited (the “Company”, NYSE: CEO, SEHK: 00883, TSX: CNU) announced on November 13 that its wholly-owned subsidiary Nexen Energy ULC (Nexen), has entered into an exclusive agreement with the Government of British Columbia, Canada to examine the viability of constructing a liquefied natural gas (LNG) plant and export terminal at Grassy Point near Prince Rupert, British Columbia, Canada.
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 Corporation and JGC Corporation, the exclusive right to pursue long-term access to Crown land at Grassy Point.
“LNG export is the most attractive option for maximizing the value of our Canadian shale gas business,” said Li Fanrong, CEO of CNOOC Limited. “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. Financial attractiveness is dependent on acceptable cost estimates, fiscal terms and obtaining acceptably-priced sales agreements.
“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 Province of British Columbia 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.”
Source: CNOOC Press Office, 2013