The Origin Energy Ltd.-operated Australia Pacific LNG group has obtained permission to acquire Origin’s undeveloped Ironbark coal seam gas project in permit ATP 788P in Queensland.
The Australian Competition and Consumer Commission said it would not oppose the transaction, first mooted by Origin in February with a sale price of $231 million (Aus.).
Ironbark, not to be confused with the BP PLC-operated Ironbark prospect offshore Western Australia, contains an estimated 134 petajoules of 2P gas resource in the Surat basin.
Origin Chief Executive Officer Frank Calabria said Origin would derive value from the development of Ironbark through its interest in APLNG, which runs a two-train CSG-LNG facility on Curtis Island near Gladstone on Queensland’s central east coast.
The company had previously rejected the options of selling the Ironbark project to a third party or developing the CSG prospect itself. Calabria said neither of these alternatives would have led to a drastically different outcome for east coast gas users from that of the sale of Ironbark to APLNG which already has pipeline infrastructure in Queensland feeding into the Curtis Island plant.
Origin can now process the gas through the plant without the need to negotiate a tolling arrangement with its venture partners.
Origin bought a 100% interest in the Ironbark permit for $660 million (Aus.) from the Pangaea Group in August 2009.