China Fuels Its Global Energy Supply

A unit of China National Petroleum Corp. agreed to buy a big slice of a shale-gas play in Canada from Royal Dutch Shell PLC, bolstering Beijing's footprint in North America's energy patch, as two other Chinese companies sealed energy deals in the U.S. and Europe.

After tiptoeing into North America in recent years, Chinese companies have ratcheted up their energy deal-making as unconventional extraction methods—from oil sands to shale gas—have transformed the continent's energy market.

PetroChina Co., the Hong Kong-listed unit of CNPC, said Thursday that it bought a 20% stake in Shell's Groundbirch natural-gas development in northeastern British Columbia. In a written statement, state-controlled PetroChina said it hoped to gain shale-gas experience from Shell. Shell said the deal was part of its longer-term cooperation with CNPC.

Neither PetroChina nor Shell disclosed terms.

Separately, EIG Global Energy Partners said sovereign-wealth fund China Investment Corp. has acquired a minority stake in the energy-asset manager, which is based in Washington, D.C. A spokeswoman for CIC declined to comment. EIG didn't disclose financial terms. EIG Chief Executive R. Blair Thomas said in an interview that the CIC stake is less than 10%.

EIG has emerged in recent years as a major, and astute, investor in the U.S. energy boom. CIC was interested in EIG's expertise evaluating energy investment, Mr. Thomas said. The investment involves no associated voting rights, EIG said. The firm said CIC is already an investor in some funds managed by EIG.

And in Spain, a unit of state-controlled China National Offshore Oil Corp. struck a deal with closely held solar-power-equipment maker Isofoton SA to create a joint venture that will develop solar-power projects mainly in China, a spokeswoman for Isofoton said. The venture's initial investment is estimated at $300 million for the development of 150 megawatts this year, and the Chinese company will provide the funds, she said.

In recent years, North American producers have fine-tuned a technique to crack tight shale-rock formations by injecting water and chemicals, freeing up trapped gas and oil. The technology has greatly boosted supply and is now being used around the world to unlock reserves long thought unreachable.

Recent government estimates indicate that China might have more gas locked up in shale than the U.S. For Chinese energy competitors, the recent flurry of deal-making is more about gaining access to technology than the commodity itself, said Mark Gilman, a Benchmark Co. research analyst in New York.

"They are trying to learn about this business, on the basis of their belief that it will better position them to assess and develop similar resources within China," Mr. Gilman said. Chinese companies have bought front-row seats in the U.S. development boom by paying billions of dollars recently for stakes in oil and natural-gas projects across America, from Michigan to Texas.

Meanwhile, the growing gas supply in North America has sent natural-gas prices tumbling, making assets relatively cheap for acquirers such as PetroChina.

In Canada, China has also invested heavily in oil-sands developments. Companies extract bitumen from a mix of quartz sand in an expensive and energy-intensive process often more akin to strip mining. Until recently, China has limited its interest in Canadian energy plays to stakes in projects or partnerships.

But last year, Chinese companies started buying entire—albeit small—companies. Canada, eager to lure investment, has so far welcomed interest. Next week, Prime Minister Stephen Harper travels to China, where he has promised to promote Canada's energy potential to Chinese officials and executives.

Mr. Harper's government has also said it is eager to export its growing oil-sands production to China, after the U.S. recently rejected a proposed pipeline from Canada to Texas. Currently, Canada sends almost all of its oil exports to the U.S.

The Groundbirch development sits in a far-off corner of Western Canada that boasts some of the richest shale-gas basins in North America, but the area remains relatively unexploited. Last year, PetroChina agreed to—and then canceled—a $5.4 billion deal with Encana Corp. to purchase a 50% interest in nearby territory.

China Petroleum & Chemical Corp., or Sinopec, in October bought Daylight Energy Ltd. of Canada for about $2.2 billion. Daylight holds a significant position in a formation near the PetroChina-Shell play.