UPDATE 1-CNOOC signs land deal for LNG terminal in Canada

Tue Nov 12, 2013 7:48pm EST

(Adds details on proposed LNG developments, CEO and Premier quotes)

By Julie Gordon

VANCOUVER Nov 12 (REUTERS) - CNOOC Ltd, China's top offshore oil explorer, has signed a sole proponent agreement with the provincial government of British Columbia to examine the development of a liquefied natural gas terminal at Grassy Point along Canada's west coast.

The deal, announced late on Tuesday, brings the Aurora LNG project one step closer to reality, though the joint venture with Japan's Inpex Corp and JGC Corp is still subject to regulatory approval and a final investment decision.

"We intend to do everything we can to responsibly and economically advance the development of an LNG facility and export terminal at Grassy Point," said Kevin Reinhart, chief executive of Nexen, a fully-owned subsidiary of CNOOC.

Reinhart, speaking at the premier's office in Vancouver, added that CNOOC and its joint venture partners have the expertise, financial capacity and track record of responsible development, along with the unique access to Asian markets, needed to make a success of the opportunity.

There are currently no LNG export terminals in Canada, though British Columbia has made the development of the nascent industry its top economic priority as it looks to tap into surging Asian demand for natural gas.

"As the global economy struggles to get back on its feet, we here in B.C. have a singular opportunity to transform our economy, to create 100,000 direct new jobs in every single corner of our province," Premier Christy Clark told reporters.

So far, three projects in the Kitimat area, south of Grassy Point, have been granted exports licenses and five others are being reviewed by federal energy regulators, but no final investment decisions have been made.

The province is expected to outline a new gas export tax regime later this month, clearing the way for energy giants including CNOOC, Royal Dutch Shell PLC and Chevron Corp to move slowly ahead on their terminal plans.

British Columbia held an open call earlier this year for development proposals for Grassy Point, a nub of land more than 1,500 km (930 miles) north of Vancouver. The province is still in talks on three other proposals for an adjacent piece of land.

CNOOC acquired its shale gas holdings in the province as part of its controversial $15.1 billion takeover of Nexen, one of Canada's largest oil producers. (Reporting by Julie Gordon; Editing by Gary Crosse and Ken Wills)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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