Woodside Petroleum's proposed acquisition of Houston-based Apache's interests in the Wheatstone, Balnaves and Kitimat projects are moving forward after the Australian Competition and Consumer Commission (ACCC) announced that it will not oppose the deal.
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Wheatstone illustration. From Chevron. |
In December, Australia’s Woodside announced its plans to purchase Apache’s two LNG projects, Wheatstone LNG in Australia and Balnaves, in addition to Canadian project Kitimat LNG for approximately US$2.75 billion.
Both Woodside and Apache overlap in the wholesale supply of natural gas to the domestic market in Western Australia (WA). The ACCC says it has determined that the proposed acquisition would be unlikely to raise significant competition concerns, however, the organization will continue to monitor the supply of domestic gas in Western Australia and will carefully scrutinize any future acquisitions in the area.
According to the ACCC, Woodside will continue to face strong competition from other suppliers in the market, including Apache, Chevron, and Santos.
“Apache will continue to supply gas to the market through its interests in the Macedon, Varanus Island, and Devil Creek projects. As a result, Apache will remain a larger supplier of domestic gas in WA than Woodside following the proposed acquisition,” says Rod Sims ACCC chairman. “Apache’s minority interest in domestic gas produced by the Wheatstone project will represent only a small fraction of the total gas to be supplied to WA, when it comes online in around 2018. The acquisition will not change the structure of the market in a material way, with Woodside’s share of the total market changing by less than 5%.”
The December deal agreement says that Woodside will acquire Apache’s equity ownership in its Australian subsidiary Apache Julimar Pty Ltd., which owns a 13% interest in the Wheatstone LNG project and a 65% interest in the WA-49-L block that includes the Julimar/Brunello offshore gas fields and the Balnaves oil development. In addition, Woodside will also acquire Apache’s 50% interest in Kitimat LNG and related acreage in the Horn River and Liard natural gas basins in British Columbia, Canada. The agreement will be effective as of 30 June 2015.
Upon finalizing the deal, Apache will continue to hold upstream acreage offshore Western Australia in the Carnarvon, Exmouth, and Canning basins along with related hydrocarbon reserves and production.
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