The Board of Arrow Energy Limited (Arrow) to unanimously recommend its shareholders vote in favour of the joint proposal to acquire 100% of Arrow shares. CS CSG (Australia) Pty Ltd, the 50/50 joint venture company owned by Shell and a subsidiary of PetroChina, has entered into an agreement with Arrow for the proposed acquisition under which it has agreed to pay $4.3 cash per share for all of the shares in Arrow, representing a total consideration of $3.2b. The offer is subject to customary conditions including regulatory approvals and Arrow shareholder approval.
Arrow has also announced its intention to make a pro-rata share distribution to its shareholders relating to the international assets and certain other interests. On successful completion of the acquisition, the joint venture would own Arrow’s Queensland CSG assets and domestic power business as well as Shell’s Queensland CSG assets and its site for a proposed liquefied natural gas (LNG) plant on Curtis Island at Gladstone.
Shell and PetroChina bring technical capabilities, capital backing, major project experience and LNG marketing ability which will facilitate the growth of Queensland’s CSG and LNG industry, and help to further develop Australia’s LNG sector.
Aiji Ge, PetroChina’s Project Manager, said “The proposal would create jobs and generate additional economic activity for Queensland through the export of 7 to 8 mtpa of LNG from the proposed Curtis Island LNG plant. PetroChina sees this joint venture as a significant commitment to building an integrated CSG and LNG business while continuing to supply domestic gas in Queensland.”
Arrow is expected to hold a shareholder meeting mid July 2010 to allow shareholders to vote on the offer.