Prime Minister Stephen Harper declared last week he didn’t want to see Canada’s economy “bought and controlled by foreign governments.” But he apparently has no problem with PetroChina’s $2.18 billion entry into Alberta’s natural gas sector.
That’s the value of a deal announced Thursday – one that will see a subsidiary of the Chinese state-owned company purchase a 49.9 percent stake in Encana’s Duvernay shale development.
The announcement came less than a week after Harper approved a $15.1 billion takeover of Alberta oil sands producer Nexen by CNOOC, another oil and gas giant controlled by the Communist government.
The Prime Minister said at the time the acquisition marked “not the beginning of a trend, but rather the end of a trend.”
“Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead,” Harper said.
Thursday’s deal between PetroChina and Encana differs in that it gives the Chinese company a non-controlling interest in a specific natural gas development, rather than ownership of an entire Canadian company.
It’s a significant deal nonetheless. “A transaction of this magnitude,” Encana president and CEO Randy Eresman said in a statement, “enables us to accelerate the pace at which the full production potential of our Duvernay lands can be achieved.”
The effects of the deal may someday be felt in B.C. PetroChina plans to help build a liquefied natural gas (LNG) terminal in Kitimat, on the province’s west coast.
B.C.’s natural gas industry is expanding so fast that premier Christy Clark recently remarked that, "energy output from LNG will likely be as big as the total energy output today from the oilsands.”
It’s not clear whether the natural gas from PetroChina’s new joint venture will be exported through the Kitimat terminal. But Encana, whose former CEO and President Gwyn Morgan is now a political advisor to premier Clark, appears to see a connection.
“[Joint ventures] have the potential to increase natural gas demand,” reads the Encana statement announcing the PetroChina deal. “A number of Encana's partners are actively exploring opportunities to export liquefied natural gas (LNG).”
Geoff Dembicki reports on climate change and energy for The Tyee.