The almost glacial takeover process began when LNG Limited lobbed in a takeover bid in February 2012.
When LNG Ltd pulled out later that year PetroChina jumped in with an offer of $185 million, although WestSide did not reveal the identity of the bidder at the time.
LNG Ltd is related to PetroChina by way of the Chinese major’s parent company also being the parent of China Huanqiu Contracting & Engineering Corporation, which owns 19.9% of LNG Ltd.
It is also partnered with LNG Ltd at Fisherman’s Landing, where it is lead engineering, procurement and construction contractor for the project.
Intriguingly, PetroChina had been active in the Queensland coal seam gas space, snapping up Molopo Energy’s Bowen Basin CSG interests for $41 million last year, agreeing to supply Fisherman’s Landing with gas from the Molopo asset.
PetroChina is also in a joint venture with Anglo-Dutch major Shell, with the pair pursuing the Arrow LNG project at Gladstone.
It is not known whether PetroChina had intended gas from WestSide’s Meridian SeamGas project, which contains 680 petajoules of proved and probable CSG, to be routed to the Arrow LNG project.
The Arrow LNG project, which is timed to avoid the construction crunch from other Gladstone LNG projects, has been called into question in recent times as Shell has indicated its reluctance to pursue onshore LNG, baulking at its cost.
The statement from PetroChina, contained in an on-market statement from WestSide yesterday, is sure to draw plenty of speculation.
Speaking to EnergyNewsPremium, WestSide chairman Angus Karoll said it did not know exactly what PetroChina meant by “the general situation in Australia”
“I obviously couldn’t comment because it would just be speculation … we don’t know,” he said.
However, he added that one could read between the lines saying that costs and regulation red tape had increased dramatically in recent times.
He also said at no stage did PetroChina communicate to WestSide what it wanted the gas for.
However, LNG Ltd updated the market this morning saying it was “disappointed” that PetroChina had chosen to pull out of the deal and it would now pursue a side deal with WestSide.
“We remain firmly of the view that the LNG project provides a lower cost alternative to other LNG projects in Australia and an opportunity for gas suppliers with uncommitted gas resources to access higher international gas prices,” LNG Ltd managing director Maurice Brand said.
“We will be using all endeavours to secure such gas resources for the LNG project.”
Regardless, PetroChina pulling the pin is of great frustration to WestSide, which said it had gone above and beyond the call of duty in allowing PetroChina access to its business during the process.
“The board was disappointed with the advice received from PetroChina given the level of cooperation afforded to them over several months, including the amount of management time invested and the patience of the company’s shareholders throughout the process,” it said.
Karoll said PetroChina’s decision to pull out was not a reflection on the quality of the Meridian SeamGas asset.
“Importantly, I believe the bidder had a positive view on the quality and value of the company’s core Meridian SeamGas asset,” Karoll said.
WestSide said it would continue to look for buyers and interested parties had already lined up to talk to the CSG company.
WestSide shares closed yesterday’s trade down by about 10.7% to 25c.
