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Cnooc Considering LNG Plant in Canada to Export Fuel to China

Cnooc Ltd. (883), China’s biggest offshore oil and gas producer, is considering constructing a liquefied natural gas plant and export terminal in western Canada and possibly exporting the fuel to China.

The plant may be built at Grassy Point near Prince Rupert in British Columbia, Cnooc said in a statement today. Cnooc, through its subsidiary Nexen Energy ULC, signed an agreement to access the land with the government of British Columbia.

LNG producers are exporting the fuel to Asia as consumers in the region pay a premium to import the energy source. Japan paid an average price of $15.74 per million British thermal units for LNG in July, according to data from LNG Japan Corp. That compares with an average of about $3.68 for U.S. natural gas futures traded in New York this year.

“LNG export is the most attractive option for maximizing the value of our Canadian shale gas business,” Li Fanrong, CEO of Cnooc, said in the statement.

Cnooc and its state-owned parent China National Offshore Oil Corp. have LNG facilities in China including in Guangdong, Shanghai, Fujian, Zhuhai and Ningbo, and plan to build more to feed China’s increasing appetite for the clean fuel. The cost of the potential project wasn’t disclosed.

To contact the reporter on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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