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Apache to sell interest in Wheatstone and Kitimat LNG projects

LNG Industry,


Apache Corporation has agreed to sell its interest in two LNG projects, Wheatstone LNG and Kitimat LNG, along with accompanying upstream oil and gas reserves, to Woodside Petroleum Limited for US$2.75 billion.

Reimbursement

Apache will also be reimbursed for its net expenditure in the Wheatstone and Kitimat LNG projects between 30 June and closing, which is estimated to be approximately US$1 billion.

Under the terms of the agreement, Apache will sell its 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 which includes the Julimar/Brunello offshore gas fields and the Balnaves oil development. The transaction will also include Apache's 50% interest in the Kitimat LNG project and related upstream acreage in the Horn River and Liard natural gas basins in British Columbia, Canada.

Based on current estimates, Apache's net proceeds upon closing are expected to be approximately US$3.7 billion.

Comments

Commenting on the decision, G. Steven Harris, Chairman, CEO and President of Apache, said: "Today's announcement marks the successful completion of one of our primary strategic goals of exiting the Wheatstone and Kitimat LNG projects. Apache recognises the contribution of our employees who have worked so diligently on these projects since their inception, and we sincerely thank them for their tremendous effort.

“I would also like to thank Woodside's CEO and Managing Director, Peter Coleman, and his entire staff for their hard work and professionalism in bringing this transaction to a successful conclusion. I am proud of Apache's legacy in advancing the Wheatstone and Kitimat LNG projects, and I am confident that Woodside's participation will have a positive impact in seeing these world-class LNG facilities through to first production. We look forward to the redeployment of the proceeds from this sale, which may be used to reduce debt, repurchase shares and to pursue other opportunities that enhance our asset base and drive profitable production growth."

Australian acreage

Upon completion of the transaction, Apache will continue to hold upstream acreage offshore Western Australia in the Carnarvon, Exmouth, and Canning basins along with related hydrocarbon reserves and production. Apache will also retain its 49% ownership interest in Yara Holdings Nitrates Pty Ltd and 10% interest in the related ammonium nitrate plant.

The transaction is expected to close in Q1 2015 and is subject to necessary government and regulatory approvals and customary post-closing adjustments. The sale of the Kitimat LNG project is subject to certain operator consents.


Adapted from press release by Katie Woodward

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/15122014/apache-exits-wheatstone-and-kitimat-lng-1960/


 

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