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Canada: Spectra Energy, BG Sign Project Development Deal

Spectra Energy Corp announced that the company has signed a Project Development Agreement with BG Group to jointly develop plans for a new natural gas transportation system from northeast B.C. to serve BG Group’s potential liquefied natural gas (LNG) export facility in Prince Rupert, on the province’s northwest coast. Spectra Energy and BG Group will each initially own a 50 percent interest in the proposed transportation project.

Spectra Energy will be responsible for construction and operation and BG Group has agreed to contract for all of the proposed capacity.

The approximately 850-kilometre (525 mile), large diameter natural gas transportation system will begin in northeast B.C. and end at BG Group’s potential LNG export facility in Prince Rupert. The new transportation system will be capable of transporting up to 4.2 billion cubic feet per day of natural gas. The project also will connect with the Spectra Energy system at Station 2 (southwest of Fort St. John), a growing natural gas hub that collects supply from multiple areas of the province and other supply basins in Western Canada.

“We are excited to be partnering with BG Group, a recognized world leader in natural gas and more specifically, LNG,” said Greg Ebel, president and chief executive officer, Spectra Energy. “This project offers B.C. a unique opportunity to access new markets, strengthen its energy infrastructure, engage stakeholders in economic growth and job creation, and ultimately secure the province’s position as a competitive energy leader.”

“Furthermore, today’s announcement initiates our next wave of investment opportunity in B.C. We are ideally positioned to create further value for our investors by leveraging surplus B.C. natural gas supplies and facilitating its export to high-demand markets in Asia. This, in turn, will provide multiple opportunities for further investment in our gathering and processing facilities in the province,” added Ebel.

“For more than half a century, Spectra Energy has been a part of communities in B.C.,” said Doug Bloom, president, Spectra Energy Transmission West. “This project will build on our expertise and track record of delivering natural gas responsibly, listening to the needs of Aboriginal and local communities, and protecting the environment, as we help deliver on B.C.’s energy potential.”

Working together with affected stakeholders and based on preliminary assessments of environmental, historical, cultural and constructability factors, early conceptual routes have been developed. Spectra Energy and BG Group will continue engaging with interested and affected stakeholders, including Aboriginal and local communities, environmental organizations and regulatory agencies, to further refine the project route.

In addition, the companies will spend the next several years closely conferring with stakeholders and working through the permitting process for the proposed transportation system. This work will include filing a project application with the B.C. Environmental Assessment Office. Based on the results of these efforts, project construction is currently expected to commence mid-decade, with service starting by the end of the decade.

As part of this commitment to transparently communicate and foster relationships in the province, Spectra Energy also announced “Energy for BC”. The new outreach initiative is designed to engage with stakeholders on the jobs, revenues and environmental benefits that natural gas can create in British Columbia.

Spectra Energy, BG Sign Project Development Deal, Canada LNG World News.

ExxonMobil Eyes North American LNG Exports

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ExxonMobil Corp is actively assessing options to export liquefied natural gas from North America, where it is a top producer of the fuel.

“In terms of exports from North America, whether it is the Gulf Coast or whether it is Western Canada, it’s something we’re actively looking at,” Andrew Swiger, senior vice president of Exxon said at a Bank of America Merrill Lynch investors conference.

North America market is different from places where Exxon has LNG projects because the gas is not stranded without a viable market, so the company is mulling options, Swiger said in remarks broadcast on the Internet.

Exxon has 340,000 shale gas acres in Western Canada’s Horn River Basin. The company also has a stake in the Golden Pass LNG Terminal in Texas.

(reuters)

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UK Gov’t Approves USD 3.3 Billion Golden Eagle Development

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Nexen Petroleum UK Ltd., a subsidiary of Nexen Inc., announced today it has received approval from the UK Department of Energy and Climate Change (DECC) to proceed with the Golden Eagle area development – a GBP 2 billion (C$3.3 billion) investment (GBP 750 million net to Nexen) that is expected to produce an estimated 140 million barrels of oil equivalent (gross) of proved and probable reserves over an 18-year period.

The Golden Eagle development encompasses both the Golden Eagle and Peregrine reservoirs located in central North Sea blocks 20/1N, 20/1 and 14/26a, approximately 43 miles from Aberdeen. The development plan for Golden Eagle incorporates a combined production, utilities and accommodation platform linked to a separate wellhead platform. Plans call for 20 development wells (16 platform-based and four subsea) to be drilled. The development will also include associated in-field and export pipeline infrastructure.

Detailed design engineering has commenced and fabrication is scheduled to start in late 2011. Pipeline and subsea installation is expected to begin in early 2013, to be followed by drilling later that same year. First oil production is forecast for late 2014 and the development is expected to have an initial gross production rate of up to 70,000 barrels of oil equivalent per day (boe/d), about 26,000 boe/d net to Nexen.

“This is a great day for the UK oil and gas industry. Regulatory approval marks a major milestone in the development of Golden Eagle, which is one of the largest oil discoveries in the UK North Sea since our Buzzard discovery,” said Phil Oldham, Managing Director of Nexen Petroleum UK Ltd.

During construction, the Golden Eagle development is expected to create employment for more than 2,000 workers. Once operational, the facility is expected to employ more than 400 people and provide thousands of indirect jobs throughout its 18-year production life. More than two-thirds of the contracts for products and services for Golden Eagle are to be sourced in the UK, a total benefit estimated at more than GBP 1.4 billion.

The project’s design, construction and operation will reflect the results of a comprehensive environmental impact assessment, which has also been approved by the DECC.

“Continuous improvement in safety and environmental performance has been built into our project planning. Safe, responsible energy development is our priority,” said Oldham.

Nexen holds significant acreage adjacent to the Golden Eagle development and continues to explore and appraise the UK North Sea to identify future opportunities and potential synergies with the Golden Eagle infrastructure. This includes participating in an active UK North Sea exploration and appraisal campaign and investing in other development projects in the region.

Nexen is the second largest oil producer in the UK. In 2010, the company’s UK-based business produced approximately 110,000 boe/d, primarily from the Buzzard field. The company currently provides employment for about 1,200 full-time and contract staff at its offices in Uxbridge and Aberdeen and at its offshore facilities.

Nexen Petroleum UK Ltd. is the operator of Golden Eagle and holds a 36.54% working interest in the field. The remaining interest is held by Maersk Oil North Sea UK Ltd. (31.56%), Suncor Energy UK Ltd. (26.69%) and Edinburgh Oil and Gas Ltd. (5.21%).

Nexen Petroleum UK Ltd. is a subsidiary of Nexen Inc., a global energy company listed on the Toronto and New York stock exchanges under the symbol NXY. Nexen is focused on three growth strategies: oil sands and shale gas in Western Canada and conventional exploration and development primarily in the UK North Sea, offshore West Africa and deepwater Gulf of Mexico.

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