I suspect, ECA has something bigger in their sleeve
There's a huge need of energy in China..I am suspecting it wasn't Petrochina, rather it was Encana, who stalled the deal, possibly because they have something bigger up their sleeves, may be a buyout offer..I added some more today
Why Encana rushes to increase NG gas supply to North America when there is a surplus in supply is puzzling? Unless the new development is aimed for LNG export.
Encana will do better simply by saying no more NG exploration and development. All resources will go to liquid and oil. This will increase the NG price and Encana can increase the top line by producing the same amount of NG!
You are right there is a backstory the press is missing. You are wrong it is an acquisition of Encana. Here is the scoop: The PetroChina deal was crafted before the quake in Japan. Post quake, many Asian countries decided to reduce their planned reliance on nuclear energy and switched over to natgas. So with this more favorable environment, Encana took a strong position at the negotiating table, and PetroChina walked. Fine. Will hurt in short term but intermediate to long term ECA shareholders will be much better off.
ECA can just sell to PetroChina at C$10 mmbtu.... in 2 years. PetroChina is now exposed to the spot price, not a pretty situation when you have rising demand, fewer rigs, aggressive decline rates, etc.