South African energy and mining company Sasol will be investing $1 billion (£643 million) in gas fields owned by Canada’s Talisman group for a 50% stake.
According to the agreement, Sasol will get 50% ownership in the Farrell Creek shale gas field in British Colombia, although the Talisman group will continue to operate the gas field.
Estimates suggest that the field – spread over an area of 51,000 acres, has reserves of 9.6 trillion cubic feet of gas, Sasol said. Both the companies agreed for future collaborations as well.
“The quality, notably the thickness and richness of the shale, and size of the Farrell Creek resource base, as well as its expected production profile, makes this a highly attractive asset for Sasol”, the company noted.
The duo has already undertaken a viability study in western Canada for a possible gas-to-liquid conversion project. However, the proposed project is yet to get regulatory approval.
This is the first deal of the South-African company in the Shale gas space. The company is the world’s largest producer of auto fuel from coal and runs GTL (Gas-to-Liquids) plants in Qatar. It is also building GTL plant in Nigeria and the proposed plant in Northern Canada will augment its feedstock supply.
Talisman currently produces between 40 and 60 million standard cubic feet of gas daily and sells entirely to the North American market.
Morgan Stanley had acted as advisors to Sasol on the deal.