By BRETT FOLEY and JAMES PATON
HOUSTON -- Apache Corp., the energy company that has
announced $9.8 billion of asset sales in the past year, is
seeking a buyer for its interests in the Wheatstone LNG
project, people familiar with the matter said.
The oil and gas producer is in early discussions with
potential buyers for its holdings in Chevron's A$29 billion
($27 billion) project in Western Australia, said the people,
who asked not to be identified as the matter is private.
Macquarie Group and Goldman Sachs Group are advising
Houston-based Apache on the sale, they said.
In the past year, Apache has sold its Argentinian operations,
deepwater assets in the Gulf of Mexico and a stake in its
Egypt business as it seeks to reduce net debt, which stood at
$8 billion at the end of March, data compiled by Bloomberg
show. Its 13% stake in the Wheatstone project
could be valued at about
$2.5 billion, according to UBS.
A number of companies across the industry are starting
to pull back from some project
s they previously had been
pursuing with a fair bit of vigor, John Young, a
Melbourne-based analyst at Ord Minnett, said by phone.
They could perceive they have more attractive
opportunities in the U.S.
A sale of the Wheatstone stake would reduce Apaches
capital spending commitments by $1.4 billion this year and
$800 million in 2015, UBS analysts led by William Featherston
wrote in a report. Proceeds could be used to fund further
share buybacks, according to the report.
The Wheatstone plant will produce 8.9 million tpy of LNG and
is due to start in 2016, according to its website. Apache
also holds a 65% interest in the Julimar and Brunello
offshore fields, which it operates and which will provide gas
to the Wheatstone facility.
Wheatstone is among seven LNG export developments being built
in Australia at a cost of about $190 billion to meet Asian
demand. High construction
costs and a strong
Australian dollar have hurt project developers including BG
Group, with the bill for Chevrons Gorgon LNG project
surging to $54 billion from an estimate of $37 billion in
Chevron owns 64% of the Wheatstone project, according to its
Australian units website. Kuwait Foreign Petroleum
Exploration Co., known as Kufpec, holds 13% while a group of
Japanese companies including Tokyo Electric Power Co., known
as Tepco, jointly hold an 8% interest.
Chinese energy companies may be interested in buying
Apaches Wheatstone holdings, Nik Burns, a
Melbourne-based analyst at UBS, said today by phone. Kufpec
may also consider buying the stake, he said.
Royal Dutch Shell agreed in January to sell its 6.4% stake in
the Wheatstone project
and an 8% stake in the
Wheatstone-Iago gas fields for $1.14 billion to Kufpec. The
Wheatstone facility will supply fuel to customers in Asia
such as Tepco, Chubu Electric Power Co. and Tohoku Electric
David Parker, a Perth-based spokesman for Apache, referred to
comments CEO Steven Farris made in a May 28 presentation.
Farris said at the time Apache was trying to
monetize Wheatstone, according to a transcript. Parker
declined to comment further.
Spokeswomen for Macquarie and Goldman Sachs declined to