Origin raises stake in Otway

Adelaide Advertiser
Tuesday 3/11/2009 Page: 59

Origin Energy will expand its presence in the east-coast energy market by acquiring Woodside Petroleum's controlling stake in the Otway gas joint venture in Victoria for $712.5 million. Under the deal, Origin Energy will become the project operator by increasing its interest from 30.75% to 51.55%. Benaris International, which holds a 12.7% interest in the project, and CalEnergy Gas (Australia), which holds a 5% stake, could increase their holdings under a pre-emption process that is part of the joint venture deal.

The parties may elect to increase their interest in the venture on terms equivalent to those agreed in the Woodside Petroleum-Origin Energy transaction, Woodside Petroleum said. "We would wind up with 65% if they (Benaris and CalEnergy) exercise their pre-emptives," Origin Energy managing director Grant King said. The transaction includes the producing Thylacine and Geographe gas fields and adjacent exploration permits, plus associated offshore production facilities, pipelines and an onshore gas processing plant near Port Campbell in western Victoria.

Woodside Petroleum flagged in February that Otway would be sold under its program of non-core asset divestment. Mr King said the deal would provide Origin Energy with earnings from natural gas sold under existing contracts to TRUEnergy as well as from the sale of liquefied petroleum gas and condensate.