Australian Regulator Clears Woodside's Purchase of Apache's Interests in the Wheatstone, Balnaves, Kitimat Projects
The Australian Competition and Consumer Commission (ACCC) on Thursday announced that it will not oppose Woodside’s proposed acquisition of Apache's interests in the Wheatstone, Balnaves and Kitimat projects.
The Wheatstone and Balnaves projects are located in the Northern Carnarvon Basin, offshore WA, while the Kitimat Project is located in British Columbia, Canada.
In Australia, Woodside and Apache overlap in the wholesale supply of natural gas to the domestic market in WA.
“Following the proposed acquisition, Woodside would continue to face strong competition from other suppliers in the market, including Apache, Chevron, and Santos,” ACCC Chairman Rod Sims said. “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. 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 per cent.”
While the ACCC determined that, in this instance, the proposed acquisition would be unlikely to raise significant competition concerns, the ACCC noted concerns expressed by the market about the effects of any further industry consolidation.
“The ACCC will continue to monitor the supply of domestic gas in WA and any future acquisitions in this area will be scrutinised carefully,” Sims said.
The Balnaves and Kitimat Projects are not expected to supply product to Australia.
In Decemeber, Apache Corporation announced it has agreed to sell its interest in two LNG projects, Wheatstone LNG and Kitimat LNG, along with accompanying upstream oil and gas reserves, to Australia’s Woodside Petroleum Limited 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.