Arrow Energy has received a takeover bid at a cash value of A$3.26bn ($2.97bn) from the Royal Dutch Shell and Petrochina joint venture.
The offer results from an effort by international energy firms to gain a share in Australia’s coal seam gas industry.
Arrow said that its decision to acquire full ownership of its A$2.2bn ($2bn) Fisherman’s Landing LNG project, which is fed by coal seam gas, and the likely sale of stake in domestic coal-seam acreage to fund the project prompted Shell to make the bid.
Arrow plans to list 20% of its international business and retain a 70% stake, while Royal Dutch Shell already holds the remaining 10% stake.
Shell also holds a 30% stake in Arrow’s coal-seam gas holdings in Queensland and made a A$3bn ($2.73bn) offer for Arrow last year.
The bid could aid in Shell’s plan to build a terminal at Gladstone port in Queensland and provide it with gas to feed multiple LNG production units, while PetroChina would be a ready-made customer for large volumes of LNG for the Chinese market.
Arrow has plans to increase its total production tenfold by 2015 driven by the Fisherman’s Landing LNG project.
