Woodside cleared to acquire Apache’s stakes in LNG projects

The Australian Competition and Consumer Commission (ACCC) said March 5 that it will not oppose Woodside’s proposed acquisition of Apache Corp.’s interests in the Wheatstone, Balnaves, and Kitimat projects. The Wheatstone and Balnaves projects are located in the Northern Carnarvon Basin, offshore Western Australia, 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 Western Australia.

“Following the proposed acquisition, Woodside would continue to face strong competition from other suppliers in the market, including Apache, Chevron, and Santos,” said ACCC Chairman Rod Sims. “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 Western Australia 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 Western Australia, 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%.”

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 Western Australia and any future acquisitions in this area will be scrutinized carefully,” Sims said.

The Balnaves and Kitimat projects are not expected to supply product to Australia.

Woodside’s interests in oil and gas exploration and production in and around Western Australia include being the operator of the North West Shelf and Pluto LNG projects, as well as developing the Browse Floating LNG project.

Apache holds interests in oil and gas interests in and around Western Australia in the Macedon, Varanus Island, and Devil Creek projects.

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