PetroChina Co (中石油), Asia’s biggest oil producer, agreed to pay BHP Billiton Ltd US$1.63 billion for its holding in Woodside Petroleum Ltd’s proposed Browse liquefied natural gas project in Western Australia.
PetroChina will acquire an 8.33 percent stake in the East Browse joint venture and a 20 percent share of West Browse, Melbourne-based BHP said yesterday in a statement.
The accord comes as Chinese oil and gas acquisitions reached a record this year, following China National Offshore Oil Corp’s (CNOOC, 中國海洋石油) US$15.1 billion bid for Nexen Inc. It gives PetroChina a share in natural gas resources off the Australian coast that may underpin an LNG venture estimated by Deutsche Bank AG to cost A$44 billion (US$46 billion). The Chinese state-owned company wants half its oil and gas output to come from overseas by the end of the decade.
The purchase confirms “China’s intensifying interest for natural gas imports,” Mirae Asset Securities HK Ltd head of energy research Gordon Kwan (關榮樂) said in an e-mail response to questions. “Expect more such deals, and they will gain speedy regulatory approvals as they are minority stakes.”
The appetite for oil and gas assets among Asia-Pacific companies is growing after energy demand in the region rose at more than double the world average of 2.5 percent last year.
Even before the deal, purchases this year by China Petroleum & Chemical Corp, CNOOC, Malaysia’s Petroliam Nasional Bhd and India’s Oil & Natural Gas Corp took the region’s total to a record US$99 billion, tying with the US for the first time.
China will drive global demand for natural gas, with its consumption rising more than 11 percent a year through 2020, according to a presentation this month by BG Group PLC.
Excluding today’s accord, Chinese companies had announced US$25 billion of oil and gas acquisitions this year, the most since at least 2007, according to data compiled by Bloomberg.
PetroChina is planning to invest at least US$60 billion this decade in global oil and natural gas assets, PetroChina chairman Jiang Jiemin (蔣潔敏) said in March.
The company said in August it was looking at assets in Central Asia, east Africa, Australia and Canada, with PetroChina president Zhou Jiping (周吉平) telling reporters at the time he was “completely confident” of achieving that goal.
Woodside, Australia’s second-biggest oil and gas producer, plans to decide next year whether to go ahead with Browse at James Price Point in the Kimberley wilderness region. Royal Dutch Shell PLC and BP PLC are also partners in the venture, while Chevron Corp earlier this year divested its Browse share in a transaction with Shell.
Woodside rose 1.6 percent to A$34.45 in Sydney trading, while BHP gained 1 percent to A$35.76. Australia’s benchmark S&P/ASX 200 Index climbed 0.2 percent.
Chinese companies have invested in other Australian LNG projects as part of agreements to buy fuel. China Petrochemical Corp (中國石化), or Sinopec Group, is a partner in a A$23 billion venture led by ConocoPhillips and Origin Energy Ltd, and CNOOC agreed last month to pay US$1.93 billion to increase its stake in BG’s project.
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