Woodside LNG purchases Apache’s stake of Kitimat LNG

The company looking to construct an LNG export terminal at Grassy Point has just reached a multi-billion dollar deal.

The company looking to construct a liquefied natural gas (LNG) export terminal at Grassy Point has just reached a multi-billion dollar deal to take some LNG assets off of Apache Energy’s hands.

Woodside Petroleum Ltd. announced it would be purchasing the Wheatstone LNG and Kitimat LNG, along with accompanying upstream oil and gas reserves, from Apache for $2.75 billion. Apache will also be reimbursed for its net expenditure in the Wheatstone and Kitimat LNG projects between June 30, 2014, and closing which is estimated to be approximately $1 billion.

“Today’s announcement marks the successful completion of one of our primary strategic goals of exiting the Wheatstone and Kitimat LNG projects,” said Apache Chairman and CEO G. Steven Farris in a news release.

“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.”

The transaction is expected to close in the first quarter of 2015 and is subject to necessary government and regulatory approvals and customary post-closing adjustments.

In January of this year, Woodside reached an agreement with the provincial government that granted the company exclusive rights to 693.6 hectares of land and 243.9 hectares of foreshore on the southern part of Grassy Point. The company paid the province $4 million at the time of the signing and was to pay another $6 million on the first anniversary of the agreement.

While a representative from Woodside was unavailable for comment regarding what the sale means for a potential Grassy Point project, the other company looking at the site announced last month that it would no longer be looking at Grassy Point as Nexen turns its eyes to Digby Island.

 

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