Nexen to anchor Aurora LNG project at Grassy Point
The Canadian Nexen Energy ULC (Nexen), acquired by China National Offshore Oil Corporation (CNOOC), and its Japanese partners Inpex Corporation (Inpex) and JGC Corporation (JGC) has signed an exclusive agreement with the Government of British Columbia in western Canada to locate its Aurora liquefied natural gas (LNG) project at Grassy Point, near Prince Rupert on the Pacific Coast.
This exclusive agreement gives the opportunity to Nexen-CNOOC to carry out the feasibility study to build and operate its Aurora LNG project on the site of Grassy Point.
From British Columbia Government side, this agreement concludes the Request for Expression of Interest published by Provincial Authorities in February 2013 calling investors to submit export LNG projects at Grassy Point.
This initiative to favor export LNG from British Columbia is somehow the consequence of the shale gas development in the USA, converting the Canadian closest partner into its first competitor on the energy market.
Four companies replied to this Expression of Interest, out of which British Columbia Government selected Nexen-CNOOC and its partners Inpex and JGC.
The three other teams of partners are continuing discussions with British Columbia Government to be also awarded adjacent parcels for their respective export LNG projects along Grassy Point.
In taking over Nexen, CNOOC accessed large unconventional reserves of shale gas in the northeast of British Columbia.
Located along the border with Northern Territories and Alberta, these unconventional recoverable reserves are estimated in the Horn River and Cordova basins to 15 trillion cubic feet (tcf) while their assets in the Liard Basin are expected to add 23 tcf of natural gas.
Inpex – JGC expect Aurora LNG first deliveries in 2020
Nexen started the exploration of these unconventional shale gas in 2006.
The first results encouraged Nexen to increase its acreage in the Northeast British Columbia shale gas basins in 2010.
In 2012, Nexen was able to produce 11,100 barrels of oil equivalent per day (boe/d).
If we consider that 1 tcf recoverable reserves are to produce 1 million tonnes per year (t/y) of LNG, Nexen-CNOOC and its partners Inpex and JGC hold far enough reserves to supply the Aurora LNG project.
On this base, Nexen had established in 2011 with Inpex and JGC a joint venture to share the working interests in the Aurora LNG project where:
- Nexen-CNOOC 60% is the operator
With this set up,Nexen-CNOOC and its partners proposed one of the most integrated project along the natural gas value chain as it involves the development of the shale gas upstream and secure commercial LNG export contracts with large global Chinese and Japanese companies.
As the engineering company in charge of the design of the Aurora LNG project, JGC is planning at least two LNG trains of 6 million tonnes per year (t/y).
To develop its Aurora LNG export project, Nexen-CNOOC and its partners Inpex and JGC will benefit from 614 hectares at Grassy Point with the ambition to load first LNG carrier in 2021.
