Daylight has lot of advantages that drew Sinopec toward it. The Canadian oil and gas company has nearly 65,000 net hectares in the gas-rich deep basin area of northwestern Alberta and northeastern British Columbia. Along with this, the company also has significant holdings in the Montney shale formation, which has a pipeline run close to Kitimat in Canada. Alberta-based natural gas producer Encana
With natural gas prices in North America below $4 per thousand cubic feet (mcf), margins run low for companies operating in this continent. To fetch higher margins, companies have been on the lookout for other international markets. This is where Sinopec may have a distinct advantage and could be at the start of something big. If the company can liquefy natural gas and ship it to Asia, it can fetch $10 to $11 per mcf, more than double the price in the American market.
Sinopec already has significant investments in Canada's oilsands. The company has a 9% stake in the Syncrude mine and a 50% stake in the Northern Lights project alongside France's Total
In sync with China's energy growth strategy
Companies such as PetroChina
If Sinopec has the Asian market as its focus, these Canadian investments could create an array of opportunities.
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Abantika Chatterjee doesn't own any shares of the companies mentioned above. Motley Fool newsletter services have recommended buying shares of Total. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.