Nexen Energy and the British Columbia government have struck a deal to allow the CNOOC Ltd. subsidiary energy company to explore possibly constructing a liquified natural gas plant at Grassy Point near Prince Rupert, in Canada.

The agreement gives Nexen Energy, along with its partnering companies INPEX Corporation and JGC Corporation, long-term access to land at Grassy Point. The companies will access the financial feasibility of developing an LNG terminal in the area based on cost estimated, fiscal terms and obtaining reasonably-priced sales agreements.

“We have a long process ahead that includes a site viability review, a comprehensive environmental impact assessment and stakeholder consultation,” said Kevin Reinhart, CEO of Nexen.

“Throughout the planning process, we will also examine the steps we can take to help the Province of British Columbia realise its goal of creating a strong and competitive LNG industry that creates jobs, strengthens pan-Pacific trading relationships and delivers lasting social and economic benefits.”

Calgary-based Nexen is among about six companies that have expressed interest in LNG terminals in British Columbia. Nexen owns 60% of the proposed project, which will be called Aurora LNG.