Apache to buy Burrup stake, plans to sell project to Orica

Apache Corp., the second-largest independent U.S. oil producer by market value, agreed to buy a 65 percent stake in Burrup Holdings Ltd. and said it’s in talks to sell most of Burrup’s explosives project to Orica Ltd.

The deal will “secure a long-term economically viable market for our natural gas production in Western Australia,” G. Steven Farris, Apache’s chairman and chief executive officer, said today in a statement. “We do not plan to operate the facility; we will rely on those with extensive experience in this sector.”

Norway’s Yara International, owner of the remaining 35 percent in Burrup Holdings, has a right to match any offers by Jan. 31. Yara is assessing its position, Bernhard Stormyr, a spokesman said Dec. 16, after The Australian newspaper reported a deal with Apache had been struck.

The facility, which is located in the Burrup Peninsula region of Western Australia, produces 6 percent of the total world output of tradable ammonia with an annual capacity of 760,000 metric tons, according to the statement from Apache, which has supplied Burrup’s ammonia plant with natural gas. Orica is the world’s biggest maker of industrial explosives.

Apache didn’t reveal the terms of the deal. The Australian newspaper reported on Dec. 15 that Apache agreed to pay $560 million for the stake.

Australia & New Zealand Banking Group Ltd. in December 2010 appointed receivers PPB Advisory to recover loans to Burrup.