Chinese onshore giant
) wholly-owned subsidiary Nexen Energy ULC has inked an exclusive
agreement with the government of British Columbia (BC) to explore
the feasibility of building a liquefied natural gas (LNG) export
facility on the northern coast of the Canadian province.
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The latest pact with the government of BC, represented by the
Ministry of Forests, Lands and Natural Resource Operations,
brings Aurora LNG joint-venture partners closer to winning
exclusive long-term access to Grassy Point near Prince Rupert,
Nexen owns 60% of Aurora, while the remaining 40% is held by
Japan-based Inpex Corp. and JGC Corp. CNOOC believes that the
value of its Canadian shale gas business can only be enhanced
through LNG export.
The prospective LNG export venture on Canada's west coast is also
likely to attract the emerging Asian markets to significant
shale-gas deposits in BC. Nexen and its partners are well
positioned to take advantage of this opportunity through its
strong financial capacity, considerable LNG expertise as well as
track record of efficient, innovative and responsible
In February, the provincial government had publicized a request
for expression of interest from companies for development of the
province-owned Grassy Point area. A total acreage consisting of
614.9 hectares of land and 158.7 hectares of foreshore land has
been offered to the Aurora LNG partners.
Nexen and its partners will now assess the feasibility of this
project based on acceptable cost estimates, fiscal terms and
well-priced sales agreements. The site's viability will be
evaluated and a widespread environmental impact assessment and
stakeholder consultation will be executed to check the
suitability of the Grassy Point site. Further, the decision is
subject to various internal and external approvals.
CNOOC carries a Zacks Rank #3 (Hold). However, there are other
sector stocks -
SM Energy Company
Western Gas Partners LP
Abraxas Petroleum Corp.
) - that hold a Zacks Rank #1 (Strong Buy) and are worth buying