PetroChina buys full stake in Canada oil sands project

[lostinblue 1,989]

TORONTO--PetroChina, Asia's largest oil and gas company, will take full ownership of the MacKay River oil sands project in Canada after Athabasca Oil Sands Corp announced Tuesday it sold the remaining 40% of the development for US$673 million.

The deal continues a trend that has seen China's state-owned oil companies invest billions of dollars in exploration or production ventures in Canada, Africa, Latin America and elsewhere. It gives PetroChina full control of one of Alberta's newest oil sands developments. Athabasca had previously sold PetroChina a 60% stake in two oil sands projects owned by Athabasca.

The sale comes less than a week after Alberta regulators approved the project.

Athabasca said it exercised its option to sell its remaining stake in MacKay River because it would like to deploy its capital and resources in other development projects. The company said it will save about $190 million in capital spending this year from the divestiture.

The first phase of the MacKay River project is expected to produce 35,000 barrels per day, eventually expanding to 150,000 barrels.

Construction of the project will begin next month with startup targeted for 2014.

China is the world's second-biggest oil consumer and has a growing appetite for oil that may one day surpass that of the U.S. which views Canada's oil sands as a pillar of its future energy needs.

Canada is increasingly looking to China to sell its vast oil reserves after the U.S. delayed a decision on the Keystone XL pipeline that would bring oil from Canada to refineries in the U.S. Gulf Coast.

Alberta has the world's third largest oil reserves, more than 170 billion barrels. Daily production of 1.5 million barrels from the oil sands is expected to nearly triple to 3.7 million in 2025. Overall, Alberta has more oil than Russia or Iran. Only Saudi Arabia and Venezuela have more.

Canada's only major oil export market is the U.S. But with the product of oil sands and pipeline delivery to the U.S. under perennial clouds of environmental objections, and with Asian demand growing, Canada wants to diversify its market, and China is eager to oblige.

The Chinese have urged the Canadian government to approve a pipeline to Canada's Pacific coast so that tankers can ship oil sands crude to China. Sinopec, a Chinese state-controlled oil company, has a stake in a $5.5 billion plan drawn up by the Alberta-based Enbridge company to build the Northern Gateway Pipeline from Alberta to the Pacific coast province of British Columbia.

Sinopec also paid $4.6 billion for a 9% stake in Syncrude, Canada's largest oil sands project.

[Darnell 8,479]

well poo, we waited too long on the pipeline stuff, headed south to Texas. Geez.