Nexen, Inpex form venture to develop BC shale gas

Nexen Inc. and a consortium led by Japan’s Inpex Corp. agreed to create a joint venture to develop unconventional shale gas assets in the Horn River, Cordova, and Liard basins in northeastern British Columbia. Terms call for Nexen to sell a 40% working interest in its northeastern British Columbia assets for $700 million.

Closing is expected in first-quarter 2012 after which Nexen will hold a 60% interest in the joint venture and will remain the operator. The remaining 40% will be owned through Inpex Gas British Columbia Ltd., of which Inpex owns 82% and JGC Corp. owns 18% interest.

The boards of Nexen, Inpex, and JGC approved the agreement. Canadian regulatory approval is required, and Inpex requires financing approval before completing the deal.

The partners plan to appraise the shale assets and make development decisions based upon economic conditions. Inpex already owns interests in LNG projects offshore Indonesia and Australia. In addition, Inpex is building a regasification terminal in Japan.

JGC is an engineering contractor having project management capabilities in refining and gas processing, LNG, and petrochemicals.

Nexen is drilling from an 18-well pad in northeastern British Columbia. Drilling is scheduled for completion in fourth-quarter 2012, increasing gross production volumes to peak rates of 155 MMcfd of gas in early 2013.

The partners will jointly investigate the feasibility of a potential downstream project, including LNG exports.

On a gross basis, the venture assets are estimated to contain 4-15 tcf of recoverable contingent resource in the Horn River and Cordova basins and another 5-23 tcf of prospective resource in the Liard basin, Nexen said.

Inpex holds a 76% working interest in the Ichthys LNG project offshore Australia and is the operator. The project, expected to deliver 8.4 million tonnes/year, is scheduled to come on stream in 2016 (OGJ Online, June 28, 2011).

In addition, Inpex has 30% interest and is acquiring an additional 30% interest from Royal Dutch Shell PLC in the Abadi LNG project offshore eastern Indonesia (OGJ Online, July 22, 2011).

Inpex is the operator of Abadi, which is expected to deliver 2.5 million tpy. The production volume from Ichthys and Abadi is equivalent to 15% of Japan's current annual LNG imports.

Partnership trend continues

The Nexen-Inpex venture is the latest in a series of partnerships in which international companies are joining Canadian companies on gas development projects. Many of the partnerships have expressed goals eventually to ship LNG to Asia.

Apache Corp. and EOG Resources Inc., both of the US, are working with Encana Corp. to build an LNG export terminal at Kitimat, BC.

Malaysian Petronas signed a $1 billion deal with Progress Energy Resources Corp. to buy a working interest in three properties in the Montey resource play in northeastern British Columbia (OGJ Online, June 3, 2011).

Penn West Exploration has a joint venture agreement with Japan’s Mitsubishi to jointly developl gas assets in Northeast British Columbia. That partnership has not yet outlined any LNG plans.

Previously this year, Encana and PetroChina International Investment Co. called off a proposed venture in Encana’s Cutbank Ridge assets in western Canada (OGJ Online, June 21, 2011).

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

Induced seismicity research effort identifies information gaps

11/10/2014 A federally coordinated effort to determine whether oil and gas activities are related to growing reports of induced seismic activity has identifie...

Canada Briefs

08/13/2014

Liard and the Besa River shale

08/20/2012

Northern Canada’s lesser-explored basins leave lots of scope for big plays, including in thick sections of Devonian-age sediments.

Quicksilver, KKR form partnership for Horn River midstream

12/28/2011 Units of Quicksilver Resources Inc., Fort Worth, and Kohlberg Kravis Roberts & Co. LP have formed a midstream partnership to build and operate ...

Pembina to expand Montney shale NGL pipeline capacity

11/11/2011 Pembina Pipeline Corp. will install five new pump stations and upgrade five existing pump stations to expand NGL throughput capacity on its Peace a...

Spectra reaches Montney shale gas processing agreements

10/21/2011 Spectra Energy Corp. has entered into multiyear agreements with Progress Energy Resources Corp. to provide a total 370 MMcfd of natural gas gatheri...

Encana to sell interest in Cabin Gas plant

10/07/2011 Enbridge Inc. reached an agreement with Encana Corp., both of Calgary, to acquire Encana’s interest in the Cabin Gas plant in the Horn River basin ...

ExxonMobil takes Argentina shale farmout

08/31/2011 ExxonMobil Exploration Argentina SRL and a unit of Americas Petrogas Inc., Calgary, will explore and possibly exploit the Canadian company’s 163,50...

British Columbia: More Horn River gas flowing

08/08/2011 Only two more wells are needed to validate nearly all of Quicksilver Resources Inc.’s exploratory licenses in the Horn River basin of Northeast Bri...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected