AGL Energy Ltd
(ASX:AGK) could end up a big winner from Royal Dutch Shell and PetroChina’s joint $3.3 billion bid for coal seam gas company Arrow Energy Ltd.
AGL has an option for a 50% stake in Arrow’s Moranbah CSG field, which it can take at any time by refunding Arrow half of its costs of the project.
The Australian Financial Review reports that the arrangement, which would cost AGL about $65 million upfront, could deliver a major gain for the company with Shell likely to be interested in its share.
Analysts say international energy giants Shell and PetroChina’s bid for Arrow Energy values AGL’s stake in Moranbah at about $1.4 billion before tax.
However, there is speculation that AGL is unlikely to sell its share of Moranbah in the short term, given the company has set itself the target of defining 2000 petajoules of gas reserves as a means of shoring up supply for its power generation business.
Arrow is still weighing up Shell and PetroChina’s offer against its plans to buy LNG Ltd’s Fisherman’s Landing LNG project.
Shell and PetroChina plan to divert the gas Arrow had intended to process through Fisherman’s Landing to Shell’s own planned LNG project at Curtis Island.
AGL Energy posted a profit of $1.596 billion for fiscal 2009.
