CERCG eyes LNG shipping in Australia
State-owned group bids on AWE for $348m as gas producer runs key project
State-owned China Energy Reserve and Chemicals Group (CERCG) on Monday said it is investigating whether to ship liquefied natural gas (LNG) from Western Australia to the gas-hungry east coast market.
The Chinese integrated energy firm, which runs oil and gas projects, processing plants and gas distribution, said in a press release that subsidiary CERCG Australia is studying the viability of transporting LNG by road, rail and ship.
CERCG Australia’s business manager Kevin Gao said on Monday the company would use LNG container tanks which can maintain liquefaction for 110 days.
“It should be possible for us to ship 100 or 200 of our 40foot ISO containers, each containing 18 tons of LNG, from Australia’s West Coast to customers on the East Coast,” he said.
The energy firm launched a A$463 million ($348 million) bid for Australian oil and gas producer AWE Ltd earlier in December, going directly to shareholders after the gas and oil producer rebuffed a slightly less friendly approach.
Meanwhile, Australia’s Mineral Resources, a provider of mining infrastructure, has offered A$484 million for AWE, topping that from CERCG.
The two suitors are both targeting AWE’s stake in a gas project in Western Australia, Waitsia, which the company has called the country’s biggest conventional gas find onshore in four decades.
AWE told its shareholders on Monday to take no action while it weighed the two offers. Its shares jumped 15 percent to trade above both offers at A$0.84, the highest level since August 2016.
Mineral Resources made an all-scrip offer worth A$0.80 a share based on its closing price on Friday, while CERCG raised its all-cash offer to A$0.73 a share over the same day.
Both offers are well below a valuation of A$0.91 from analysts at the Royal Bank of Canada, which ran a recent share sale for AWE.
CERCG said on Monday it is mainly looking to supply gas to remote communities and mine sites in Australia using its technology to liquefy gas, transport and re-gasify it in areas not connected to pipelines.