Apache Corp. has completed previously-announced plans to
acquire an interest in Burrup Holdings, owner of an ammonia
fertilizer plant in the Burrup Peninsula region of Western
Australia, the company said on Wednesday.
Apache paid $439 million, including customary closing
adjustments, to acquire a 49% interest in Burrup, bailing out
lender ANZ Bank.
Meanwhile, Yara International paid ANZ Bank $143 million,
including adjustments, to increase its ownership in Burrup
Holdings to 51% from 35%.
Yara will become operator after a transition to ensure
continued safe operation of the plant, officials said.
Apache has supplied natural gas to Burrup Fertilisers since
the plant commenced production in 2006.
With a capacity of 850,000 tpy, the plant is one of the
world's largest ammonia facilities, producing 6 % of the
total world output of tradable ammonia.
The plant will be renamed Yara Pilbara.
"This new ownership structure will stabilize the Burrup project after a period of
significant uncertainty, and secure a long-term economically
viable market for our natural gas production in Western
Australia," said Thomas M. Maher, vice president of Apache's
Australia region and managing director of Apache Energy.
This ownership stake provides a means to increase the
value of our Australian gas reserves because ammonia prices
historically have been correlated to the generally higher
prices of corn and crude oil on international markets, he
Apache entered into a revised long-term natural gas supply
contract with Burrup Fertilisers in November 2011.
"We are pleased to be associated with Yara, which is one of
the world's largest producers of ammonia fertilizers and has a
long-term off-take agreement for Burrup's production," Maher
Through the transaction, Apache also acquired an interest in
a planned technical ammonium nitrate (TAN) plant in the Burrup
Peninsula region to be developed with Yara as operator.
Yara intends to proceed with the TAN plant and will assume
control of negotiations concerning ownership of the project with Orica, an
Australia-based global supplier of mining explosives.
The fast-growing iron ore industry in Western Australia's
Pilbara region has created increased demand in the niche market
for explosives-grade TAN, the main raw material for ANFO
(porous ammonium nitrate plus fuel oil), the most widely used
civil explosive currently on the market.