BEIJING - PetroChina Co Ltd, China's largest oil producer, announced Thursday that it has agreed to buy a 50-percent stake in a natural gas project with North American gas giant Encana Corporation for 5.4 billion Canadian dollars ($5.43 billion).

The cooperation agreement between Encana and PetroChina International Investment Company Limited, a subsidiary of PetroChina, allows PetroChina to acquire a 50-percent interest in Encana's Cutbank Ridge business assets in British Columbia and Alberta, Canada.

The assets cover 1.3 million acres of land, with a gas processing capacity of approximately 700 million cubic feet per day, 3,400 kilometers of pipelines and underground gas storage, said a statement on the PetroChina website.

The two companies would form a 50-50 joint venture to increase the project's gas production. Encana would continue to operate the joint venture's assets and market all the production at first, said the statement.

Related readings:  PetroChina halts gas shipments to industry  PetroChina's oil, gas output tops 200m tons in 2010  PetroChina,INEOS announce new JV in Europe  China's net oil imports rise

The joint venture would be operated under the direction of a joint management committee, it said.

Randy Eresman, Encana's president and chief executive officer, said in the statement that the deal represented "a significant achievement and major milestone in the developing relationship of our two companies."

The statement said PetroChina, which is owned by the China National Petroleum Corporation, "expects the joint venture to provide a platform for entering the major market in North America."

The company had been looking for years for opportunities to work with major Canadian oil and gas companies in areas including LNG and oil sands in Canada, and projects in China, it said.

The transaction was still waiting for regulatory approvals from the Canadian and Chinese authorities.