BHP to sell its interest in Browse to PetroChina for US$1.63b

PetroChina, Asia’s biggest oil producer, agreed to pay BHP Billiton US$1.63 billion for its holding in Woodside Petroleum’s proposed Browse liquefied natural gas project in Western Australia.

PetroChina will acquire an 8.33 per cent stake in the East Browse joint venture and a 20 per cent share of West Browse, BHP said on Wednesday in a statement.

The deal comes as Chinese oil and gas acquisitions reached a record this year, following Cnooc’s US$15.1 billion bid for Nexen. It gives PetroChina a share in natural gas resources off the Australian coast that may underpin an LNG venture estimated by Deutsche Bank 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,” Gordon Kwan, head of energy research at Mirae Asset Securities HK, said. “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 per cent last year. Up until now, purchases this year by China Petroleum & Chemical Corp., Cnooc, Malaysia’s Petroliam Nasional 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 per cent a year through 2020, according to a presentation this month by BG Group.