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

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

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