Talisman Energy (NYSE:TLM) said Thursday that it has decided to exit a gas-to-liquids joint-venture project with South Africa’s Sasol in the Montney shale in northeast British Columbia after concluding there are better ways to move forward with its long-term strategy.
The Canadian company’s plan comes after it was granted the option to participate in the feasibility study as part of the ongoing project.
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Talisman had said last year that it would decide by mid-2012 whether moving forward with the plant would have a greater cost benefit than if it were to just sell gas into the North American market or liquefy it to ship overseas.
“After careful consideration, we have concluded that there are better ways to allocate capital in support of our strategy," Talisman CEO John Manzoni said in a statement.
The company’s immediate focus, he said, is to “accelerate investment in near-term liquids opportunities” with the goal of increasing liquids and oil-linked gas production to 300,000 barrels a day by 2015.
The companies were studying whether western Canada could support a gas-to-liquids plant that could help turn low-value natural gas into diesel or other fuels.
The No. 5 oil explorer in Canada said its decision to exit the deal will not impact its other projects with Sasol.