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 added.
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 said.
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.