Centrica, Qatar buy C$1 billion of gas assets in Canada

Mon Apr 15, 2013 4:31am EDT
 
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LONDON/DUBAI (Reuters) - Britain's Centrica (CNA.L: Quote) and Qatar Petroleum International (QPI) have bought gas and oil assets in Canada from Suncor Energy (SU.TO: Quote) for C$1 billion, ($987 million) including some with potential for shale gas production, they said on Monday.

The deal is the first joint investment for Britain's biggest energy supplier and the world's largest liquefied natural gas (LNG) exporter since they signed a memorandum of understanding (MoU) in December 2011.

It also shows how Middle East oil and gas producers are increasingly interested getting a share of the unconventional oil and gas production boom that has hit their sales to North America.

The fields in the Western Canadian Sedimentary Basin will be held in a new partnership in which Centrica will own a 60 percent share with the remaining 40 percent owned by QPI.

The Suncor assets overlap with existing Centrica assets in Canada, which should help cut development costs, the UK-based utility said.

"The acquisition provides attractive returns in a region we know well, and significantly increases the size and quality of our portfolio," Sam Laidlaw, Chief Executive of Centrica, said.

They include proven and probable conventional reserves estimated by the partners at 978 billion cubic feet equivalent (bcfe), 90 percent of which is gas.

The deal also includes over 1 million acres of undeveloped land with potential for more production through the use of horizontal drilling and multi-stage fracturing, a technique used to flush out unconventional gas.

They expect modest production of around 250 million cubic feet equivalent per day in 2013, equal to around 15 million barrels of oil equivalent per year.   Continued...

 
Centrica CEO Sam Laidlaw speaks during the CERAWEEK world petrochemical conference in Houston March 7, 2012. REUTERS/Donna W. Carson