CALGARY, Canada /HONG KONG - PetroChina is purchasing half of a prolific shale gas project from Canada's Encana Corp for C$5.4 billion ($5.4 billion), marking the largest Chinese investment yet in a foreign natural gas asset.

Chinese companies such as PetroChina and CNOOC have been scouring globally for unconventional gas assets to reduce reliance on coal and satisfy its energy hunger to fuel its economy, now the world's second-largest.

In January, CNOOC struck a $570 million shale deal with US natural gas company Chesapeake Energy Corp, its second such deal with the American company in about four months.

On Thursday, shares of PetroChina, Asia's largest oil and gas producer, fell more than 2 percent in Hong Kong trade, lagging the Hang Seng's 0.7 percent fall, as analysts said the deal, to be paid all in cash, was pricey.

Encana shares closed down 60 Canadian cents, or 2 percent, at C$30.65 on the Toronto Stock Exchange. It announced the deal after the market closed.

"Not too dissimilar to the CNOOC/Chesapeake deals, the PetroChina/Encana deal is another win-win that enables China to acquire quick exposure to the long term shale oil/gas boom in North America," said Gordon Kwan, an analyst with Mirae Asset Management in Hong Kong.

Kwan said the deal will also allow Chinese companies like PetroChina to migrate the technology back to China for its development in domestic unconventional oil and gas resources.

Encana, one of North America's largest gas producers, and State-owned PetroChina agreed to form a 50-50 joint venture to develop the Cutbank Ridge lands in British Columbia over several years.

The deal, which is subject to approval by the Canadian and Chinese governments, came after nine months of negotiation, both companies said.

The venture will allow Encana to accelerate development of its vast reserves while keeping a lid on capital investments at a time when natural gas markets are weak. For the Chinese, it's another step toward the country's goal of tripling the use of the lower-carbon fuel over the next decade.

Reuters