By ROSS KELLY AND WAYNE MA
SYDNEY -- PetroChina confirmed that it withdrew a bid for an Australian coal bed methane gas producer but said it would continue to invest in other Australia projects because of their commercial value and importance for energy security.
"We have completed a number of mergers and acquisitions in Australia and will make further investments in those projects," the company said in an email. "These projects are of strong operational and strategic significance and will supplement PetroChina's reserves in the future, secure needs for sustainable overseas development and bring economic returns for the company."
WestSide Corporation, which has coal bed methane gas prospects in Queensland, said earlier that PetroChina withdrew its $184.7 million offer for the company.
The decision comes as labor shortages and cost pressures have squeezed energy projects in Australia.
PetroChina made the bid for WestSide in November but withdrew almost six months later "because the general situation in Australia has changed so much," WestSide said, without elaborating.
WestSide, which produces natural gas extracted from coal deposits, said it was still in talks with other parties that could invest in the company either through a gas sales agreement, joint venture or takeover.
PetroChina's decision comes about one month after Australia's Woodside Petroleum and its partners, including Shell, shelved plans for a LNG terminal that was forecast to cost more $40 billion.
China has been on an international quest to secure multiple sources of natural gas to help it meet targets to more than double the cleaner burning fuel's contribution to its energy mix to 10% by 2020 from less than 5% now.
WestSide's gas would have supported a small LNG project in Queensland planned by PetroChina and a smaller Australian partner, Liquefied Natural Gas Ltd. That project was slated to produce up to 3 million metric tons of LNG a year.
PetroChina bought another small Queensland gas producer, Molopo Energy, last year for $44.21 million, and is also is a partner with Shell in a much larger joint venture project with Arrow Energy, also in Queensland.
The Arrow partners are still considering whether to go ahead and build a multibillion dollar LNG plant. They face mounting cost pressures and the possibility that competing LNG supplies to Asia could emerge from North America and East Africa, making it harder to find customers.
Dow Jones Newswires