Calgary-based Encana said Thursday that PetroChina will spend $2.18 billion to "gain a non-controlling 49.9 per cent interest in Encana's approximately 445,000 acres in the Duvernay play."
Encana says the emerging Duvernay formation is known to contain at least nine billion barrels of oil equivalent petroleum.
The two companies plan on spending $4 billion in total on new drilling, completion and processing facilities.
"A transaction of this magnitude keeps us on track to create a more diversified commodity portfolio and maintain our balance sheet strength. It is a strong endorsement of Encana's position as a reliable long-term partner," Encana CEO Randy Eresman said.
Encana and PetroChina began working on another natural gas joint venture in 2010, but abandoned it a year later after the two couldn't agree on how the asset would be operated.
PetroChina's investment is unlikely to be subject to the same level of regulatory scrutiny as the China National Overseas Oil Corp. had to go through while purchasing oil company Nexen for $15 billion because the former is buying a minority stake.