South African energy group Sasol [JSE:SOL] said on Tuesday it would pay $1.08bn for its second shale gas interest in Canada, in a move to expand its gas portfolio.
Sasol said it would buy a 50% stake in Talisman Energy's Cypress A acreage in the Montney Basin in Canada, where the company also bought a stake in Talisman's Farrell Creek assets last year.
The 57 000 acres of land covered by Cypress A represent an estimated contingent resource of 11.2 trillion cubic feet (tcf) of gas.
Sasol will pay an initial C$263m in cash, with the remaining C$787m in future development costs.
Sasol and Talisman are studying the possibility of establishing a gas-to-liquids plant in Canada. Sasol said the acquisition could allow for a scalability of the proposed plant.
See also: Prospecting for gas in the Karoo