Even in a deal where China invests in Canadian natural gas fields, the oil sands are lurking in the background.
The Duvernay play, in contrast to other areas that have attracted interest from Asian state-owned enterprises, is not so much about the potential for shipping liquefied natural gas across the Pacific.
Instead, one of the draws for PetroChina International Investments Co. as it looked at Encana Corp.'s lands in the Duvernay shale play was the large amount of natural gas liquids that are produced in the area.
Those liquids are crucial for oil sands producers, and in short supply. The liquids can be used as diluent, that is, they can be combined with the sludgy crude from the oil sands to create something wet enough to flow down a pipeline.
PetroChina has significant investments in the oil sands, some on its own and some in partnership with Athabasca Oil Corp., and is going to need a lot of diluent as production comes on stream.
And it's not alone. There are forecasts that the amount of diluent needed in Canada's oil sands will soar by as much as four times in coming years. So locking up supply, especially close at hand, is a strategic move.
Royal Bank of Canada's investment banking unit advised Encana on the transaction. Across the table, Barclays represented PetroChina.