PetroChina, Shell win Arrow with sweet offer

09:47, March 23, 2010      

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Australian coal seam gas producer Arrow Energy Ltd on Monday accepted the sweetened A$3.5 billion ($3.2 billion) takeover offer from energy giants PetroChina Co and Royal Dutch Shell Plc.

PetroChina and Shell will acquire all Arrow shares at a consideration price of A$4.70 per share in cash, the companies said in a statement. That marks a 35 percent premium to Arrow's last trade ahead of March 8, when the two companies offered A$4.45 per share for the assets.

Once the deal is completed, CS CSG (Australia) Pty Ltd, a 50-50 joint venture company owned by PetroChina and Shell, will own Arrow's Queensland coal seam gas (CSG) assets and power business in Australia. The joint venture will also control Shell's Queensland CSG assets and its site for a proposed liquefied natural gas (LNG) plant on Curtis Island at Gladstone, said the statement.

PetroChina and Shell plan to export up to 8 million tons of LNG per year from the proposed Curtis Island plant in Australia, said Ge Aiji, PetroChina's project manager.

The transaction combines Shell's global LNG expertise, PetroChina's operational experience, and their access to regional gas markets.

The companies expect to take a final investment decision on the Curtis Island LNG project by 2012, Malcolm Brinded, Shell's executive director for upstream international business, said.

"The Arrow deal will expand PetroChina's gas portfolio and help China secure more gas supplies," said Qiu Xiaofeng, an analyst at China Merchants Securities.

Arrow is expected to hold a shareholder meeting in July to allow shareholders to vote on the offer.

Source: China Daily

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