Encana Corporation and  the China National Petroleum Corporation have signed a memorandum of understanding, formally called a Heads of Agreement, that outlines a framework for the two companies to work towards a possible  joint-venture in the development of certain lands in Encana's natural gas plays in Horn River, Greater Sierra (Jean Marie formation) and Cutbank Ridge (Montney formation) in northeastern B.C. .

 

Encana's President & Chief Executive Officer ,Randy Eresman, says if the agreement leads to a joint venture, it is expected to “lower costs, reduce risks, increase our capital efficiencies, improve project returns, optimize production techniques and tap natural gas opportunities that would otherwise remain dormant for some time."

 

Eresman says this initiative with the China National Petroleum Corporation (CNPC) could mean increased investment in the three B.C. holdings and could lead to new jobs and new markets for natural gas.

 

In the MOU , both companies state  they "believe the full-scale partnership and cooperation will bring a win-win situation and help to realize the business goals of each" company and they "intend to jointly and comprehensively develop the natural gas value chain business in Canada."

 

The MOU would see Encana drill and complete the wells, build the processing facilities and pipelines, while CNPC would invest money to earn an interest in the assets and gain technical knowledge about the process.

 

The companies expect that it will take several months to negotiate a potential joint venture.