BG shareholders loving marriage

JUST about all of BG Group’s shareholders approved its $69 billion takeover by UK rival Royal Dutch Shell overnight, paving the way for the only major acquisition since oil prices started their precipitous decline 18 months ago.

Anthony Barich

An overwhelming 99.53% of BG’s shareholders approved the deal, which proved a lot less dissent than the 83% or so of Shell’s shareholders who voted for the transaction the previous day at its The Hague headquarters in The Netherlands.

Either way, both votes easily cleared their hurdles.

The merger, for which the cogs started churning when Shell made a cash and share offer of 383p in cash and .4454 of Shell B shares in April last year, will now wrap up on February 15.

The deal valued BG shares at about £13.5 each, a 52% premium to the 90 trading day volume weighted average price on April 7, and should make Shell an LNG powerhouse as it gets its hands, among other things, on BG’s $US28 billion Queensland Curtis LNG – the first of the state’s three CSG to LNG mega-projects to go online.

The merger could also open the door for Shell to finally monetise the CSG fields in the Surat and Bowen basins that make up the shelved Arrow project that the UK super-major owns with Chinese giant PetroChina.

At the moment, Arrow Energy produces natural gas from about 1200 CSG wells to power stations in Townsville (234 megawatts), Daandine (33MW), Braemar 2 (450MW), Braemar (502MW) and Moranbah (12MW), along with industrial users in Townsville and Moranbah.

Arrow also has exploration tenements covering about 21,000sq.km across Queensland, which are likely to now be tied into QCLNG as a cheaper option than a standalone LNG plant.

When Queensland’s three LNG projects were first being considered, analysts suggested to the operators including Gladstone LNG owner Santos that they share infrastructure, but that advice was largely ignored.

Now oil prices are a fraction of what they were, at 12-year lows, and major banks doubt Santos is even breaking even or, in the case of Origin, doubt whether it can keep paying for Australia Pacific LNG.

The approval of the merger by Shell and BG shareholders comes as the Port of Gladstone welcomed the one hundredth LNG carrier, marking a major milestone for its new export industry earlier this month as the Maran Gas Mystras berthed at QCLNG facility on January 6.

The first LNG vessel to enter the port, Methane Rita Andrea, berthed at QCLNG Boxing Day 2014, with the first shipment of LNG exported on January 5, 2015.