By Brien Southward
In the latest in a series of investments by state-owned Chinese companies in Canadian energy assets, PetroChina has acquired 20 percent of Royal Dutch Shell’s shale gas Groundbirch lands in British Columbia. Previous investments have been made in assets in Alberta, such as PetroChina’s previous purchase of 100 percent interest in the MacKay River development.
Last year, a deal fell through between PetroChina and natural gas giant Encana to collaborate on developing British Columbia’s shale assets. Professor Wenran Jiang of the University of Alberta had told the Washington Post that the collapse of the Encana-PetroChina deal was not likely to be the end of PetroChina's pursuit of Canadian shale assets, a prediction confirmed by its purchase of a share in the Groundbirch lands.
As China’s economy develops and its population exceeds 1.5 billion people, by far the most populous nation in the world, its energy needs have grown very rapidly. With such vast untapped resources located conveniently across the ocean in Canada, Chinese companies besides PetroChina have begun operating in Canada as well. Another state-owned Chinese petroleum company, Sinopec, obtained a 9 percent share in the Syncrude Canada mine a few years ago, and last year bought Canada’s Daylight Energy for $2.1 billion.
Meanwhile, Shell and other companies have been looking to build liquefied natural gas (LNG) export terminals off the coast of British Columbia. By recovering and processing petroleum assets so close to Canada’s Pacific coast, petroleum companies only need to build pipelines between the shale deposits and the newly-constructed export terminals on the Pacific to be able to ship LNG across the ocean to China.
