Greenwire: Royal Dutch Shell PLC and PetroChina Co. have agreed to buy Arrow Energy Ltd., officially bringing China into Australia’s coal-seam gas industry.
The two companies offered $3.2 billion for the business, an increase from their original bid. Arrow is Australia’s largest holder of permits to extract gas from coal seams, which can be processed into liquid form for export.
The assets will be valuable for China because of the close geographical proximity and large scale of the reserves.
“Australia is a key growth center for Shell globally,” said Shell Australia Chairman Russell Caplan. Arrow “will give us scale in Australia and is underpinned by secure access to the critical Chinese market.”
Shell will open a liquefied natural gas project near the Queensland coast to produce as much as 16 million metric tons of LNG a year.
The move is the latest in a flurry of oil and gas companies trying to corner global markets in alternative gas production (Ben Sharples, Bloomberg, March 22). – JP