Canadian firms Bennett Jones and Burnet, Duckworth & Palmer are advising on a $2.2 billion joint venture between PetroChina Co. and Encana Corp. involving a shale gas reserve in Alberta.

PetroChina, through its subsidiary Phoenix Duvernay Gas, is purchasing a 49.9 percent stake in Encana’s undeveloped Duvernay shale gas project for $1.2 billion. The Chinese state-owned company will put another $1 billion toward development of the project over the next four years.The deal follows the announcement of another high-profile entry by a Chinese state-owned enterprise into Canada. Last week, the country’s government signed off on China National Offshore Oil Corp.’s $15.1 billion takeover of Nexen Inc. The Canadian government has since laid out new rules that forbid foreign state-owned enterprises from controlling Canadian oil-sands businesses in most circumstances. However, joint ventures and other investments are allowed.

One lawyer, in an interview with Reuters, said the PetroChina-Encana venture may prove less controversial because the project involves shale gas and not the country’s oil sands reserves.
 
“This is a step removed from the oil sands and so to the extent that this is not Canadian oil sands, it does seem to be in a less sensitive area and not directly in the bulls-eye,” Richard Steinberg, head of Canadian firm Fasken Martineau’s mergers and acquisitions practice, told the news service. He added that the deal looks to meet all of the government’s new requirements for foreign investment.
 
PetroChina and Encana tried to form a similar joint venture, worth a proposed $5.5 billion, last year without success. PetroChina had planned to buy half of Encana’s Cutbank Ridge shale gas assets in British Columbia and Alberta, but the deal collapsed when the companies could not agree on asset valuations and other procedural issues, PetroChina spokesman Mao Zefeng said at the time.
 
Burnet, Duckworth & Palmer Calgary partner Alicia Quesnel is acting for Encana in its deal with PetroChina, as she did during last year’s negotiations between the two companies.
 
While Osler, Hoskin & Harcourt Calgary partner Robert Desbarats served as counsel to PetroChina in the first round of negotiations with Encana related to the joint venture, a PetroChina spokeswoman confirmed to The Asian Lawyer that Bennett Jones is advising the company on the Duvernay joint venture with a team led by Calgary partners Donald Greenfield and Patrick Maguire.
 
Greenfield earned Am Law Daily “ Dealmaker of the Week” honors earlier this year for leading the Bennett Jones team advising Calgary-based Flint Energy Services in connection with its acquisition by San Francisco construction and engineering company URS for almost $1.5 billion, including assumed debt.  Maguire took the lead for Japan’s Mitsubishi Group on its $2.9 billion acquisition of a 40 percent stake in Encana’s British Columbia shale project earlier this year, after negotiations with PetroChina fell apart in 2011.
 
The agreement with Encana marks the second deal this week for PetroChina. King & Wood Mallesons is advising the company on its $1.63 billion acquisition of a stake in a Western Australia natural gas project from BHP Billiton Ltd.