PetroChina Takes Stake in Encana Gas Project for $5.43B
PetroChina and Encana signed a Co-operation Agreement, that PetroChina would acquire a 50 percent interest in Encana's Cutbank Ridge business assets in British Columbia and Alberta, Canada at a consideration of C$5.4 billion (US $5.43B). The assets cover 1.3 million acres of land, approximately 700 mmcf/day processing capacity, 3,400 km of pipelines and an underground gas storage.
Separately, the two companies will, in proportion to their investment, each invest 50% into a joint venture to increase natural gas production. Encana will continue to operate the joint venture's assets and market all the production at first. The joint venture will be operated under the direction of a joint management committee.
"This agreement is the culmination of more than nine months of discussions between PetroChina and Encana and represents both a significant achievement and major milestone in the developing relationship of our two companies. By combining resources with PetroChina in this joint venture, we would expect to recognize additional value through accelerating our pace of development and by leveraging increased capital and operating efficiencies through further technical advancements and through greater certainty of the long-term development plan for the business assets," said Randy Eresman, Encana's President & Chief Executive Officer.
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