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Aussie energy giant Woodside to buy into BHP LNG assets

Xinhua, September 5, 2016 Adjust font size:

Australian energy giant Woodside Petroleum has agreed to buy half of BHP Billiton's stake in the Scarborough area gas fields, off the Western Australia coast, as it continues to expand its portfolio amid a prolonged slump in energy prices.

The company told the ASX on Monday that it will pay BHP 250 million U.S. dollars on completion of the deal, and another 150 million U.S. dollars when a final investment decision is taken to develop the Scarborough gas field.

In return, it will get a 25 percent and 50 percent stake in the two offshore permits that make up the Scarborough gas field, as well as a 50 percent stake in two other offshore permits that contain the nearby Jupiter and Thebe gas fields.

The acquisition would complement Woodside's growth strategy and leverage its deepwater and LNG capabilities, chief executive Peter Coleman said on Monday.

The cash-rich company finds itself in a better position than debt-laden peers who have struggled amid the price downturn, and has been looking out for acquisition opportunities even as competitors are retreating from international acreage.

It snapped up ConocoPhillips' stake in three deepwater oil blocks off the coast of Senegal in July for 350 million U.S. dollars. It has also been looking at options to develop its recent gas discoveries in Myanmar.

The three Scarborough gas fields hold probable reserves of 8.7 trillion cubic feet of gas. Woodside's net share is estimated at 2.6 trillion cubic feet of gas.

The assets are part of a planned 10 billion U.S. dollars LNG project by BHP and U.S. energy giant ExxonMobil that was shelved following the collapse in oil and gas prices since mid-2014.

The deal is subject to regulatory approvals and consent from ExxonMobil, which holds pre-emption rights on the assets.

At the close on Monday, Woodside shares were up 43 cents or 1.53 percent at 28.38 Australian dollars (21.56 U.S. dollars) while BHP shares were also up 49 cents or 2.47 percent at 20.36 Australian dollars (15.46 U.S. dollars). Enditem