Apache sheds Wheatstone, Kitimat LNG stakes to Woodside

US-based oil and gas explorer Apache has sold its equity stakes in the Australian Wheatstone LNG and Western Canadian Kitimat export projects to Australia’s Woodside Petroleum for $2.75bn, the company said.

Apache is selling its 13% stake in the 8.9mtpa Wheatstone LNG plant, as well as a 65% interest in upstream interests that include the Julimar/Brunello offshore gas fields and Balnaves oil development, the Houston-based company said on Monday.

The deal also includes Apache’s 50% interest in the planned 10mtpa Kitimat LNG export proposal, shared with project operator US-based oil and gas producer Chevron, along with upstream acreages in the Horn River and Liard gas basins in British Columbia.

The transaction, which is expected to close in the first quarter of 2015, has an effective date of 30 June 2014.

Apache has been under pressure to extricate itself from the expensive Western Canadian greenfield export project from activist investor Jana Partners.

The Kitimat LNG project was the first to receive its licence from Canada’s National Energy Board (NEB) in 2011, but efforts have stalled to market long-term LNG contracts on an oil-indexed basis since then.

The Kitimat project has already shuffled its equity partners after Chevron bought out Apache’s former partners Canadian producer Encana and US-based exploration and production company EOG Resources in December 2012. Since then, Apache and Chevron have sought other equity partners in order to secure customers but while discussions were ongoing with potential Asian buyers, no deals had been concluded.

For Woodside Petroleum, the move gives the Australian gas producer a more global reach as an LNG producer, already adding to the company’s experience as operator in the existing Australian North West Shelf (NWS) LNG and Pluto LNG projects.

Woodside has previously secured a 20-year, long-term sales agreement with US-based export developer Cheniere for 0.85mtpa free on board (FOB) offtake from the planned 13.5mtpa Corpus Christi LNG in south Texas. The volumes were secured from Corpus Christi, a greenfield development, from the second out of the three-train complex which has a scheduled start date of 2019.

The sale of the stake in Kitimat LNG is subject to “certain operator consents,” according to Apache.

Apache will continue to hold acreage in offshore western Australia in the Carnarvon, Exmouth and Canning basins. The company also stated its intent to retain a 40% stake in Yara Holdings Nitrate and a 10% stake in an associated ammonium nitrate plant. Ruth Liao