PKN Orlen Reportedly in Shale Gas Deal With Encana

PKN Orlen SA is reported to have reached an agreement with Encana Corporation, Canada’s biggest natural-gas producer, for a partnership in shale gas interests.

Rzeczpospolita quotes a source as saying that the proposed transaction will include the exchange of interests in shale plays. Orlen will become a shareholder in a number of Encana’s U.S. shale gas fields and in return, will offer its new partner access to its Polish shale gas concessions.

Encana confirmed it’s in talks with one or more Polish companies but wouldn’t say whether discussions included the trading of exploration licences for rights to drill shale for gas in Poland.

Orlen hold six shale gas concessions in the Lublin region (Bełżyce, Garwolin, Lubartów, Lublin, Wierzbica, Hrubieszów) and was recently granted two additional concessions in the region of Łódź and Sieradz.

Orlen has begun to undertake seismic work on its concessions in the region of Lublin, the results of which are expected in mid-2011.  The company planed two wells in the second half of 2011, and another in the first half of 2012.

The Polish based refiner is looking to transform itself into a multi-energy company with its own oil and gas extraction and energy production, with shale gas exploration forming a very important element of the strategy.

Orlen Chief Executive Jacek Krawiec had said earlier that the company was looking towards working with an experienced partner in the exploration and exploitation of shale gas.