MELBOURNE (Dow Jones)--ConocoPhillips (COP) said Monday it agreed to pay up to US$8 billion for a half share in the coal seam gas assets of Origin Energy Ltd. (ORG.AU) and an associated liquefied natural gas project in the Australian state of Queensland.
The deal would see ConocoPhillips make an initial contribution of US$5 billion and then carry Origin for the first US$1.5 billion in joint venture expenses.
It would then make up to four more payments of US$500 million each based on project milestones as the pair work to deliver an LNG plant at Gladstone to be fueled by coal seam gas.
"With this investment, ConocoPhillips has gained access to the leading coal bed methane resource in Australia, comprising 8.1 million net acres," ConocoPhillips Chief Executive Jim Mulva said in a statement.
Origin has rejected a US$13.83 billion takeover offer from BG Group PLC (BG.LN) and has been looking for another major player to buy into its coal seam gas fields and help drive its planned coal seam gas-fired LNG development.
-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4313; [email protected]
ORG Price at posting:
$15.23 Sentiment: Buy Disclosure: Not Held
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