[AUSTRALIA] ConocoPhillips seals £4.5bn joint venture with Origin Energy

ConocoPhillips has agreed to pay up to $8bn (£4.5bn) to join Origin Energy in a natural gas venture in Queensland, potentially trumping a hostile takeover bid for the company from Britain's BG Group.

The US oil company will initially take a $5bn, 50pc stake in the venture, which will convert coal-seam gas into liquefied natural gas for export to Asia.

Shares in Origin Energy, Australia's biggest producer of gas from coal seams, jumped as much as 28pc in Sydney on the back of the news. LNG demand is set to increase by 10pc a year through 2015, more than five times projected gains in crude oil, as power producers switch to cleaner fuels, according to Citigroup.

Origin Energy last month short-listed bidders for a coal-seam gas venture, saying this would provide more value for shareholders than BG Group's A$13.7 billion takeover offer.

"This is a massive deal and the sum that ConocoPhillips is prepared to pay really puts a firm valuation under Origin Energy," said Gavin Wendt, a senior resources analyst at Fat Prophets Funds Management in Sydney told Bloomberg. "It makes it impossible now for BG with its current offer."

Origin Energy reiterated its recommendation that shareholders reject BG's offer. BG is reviewing Origin Energy's transaction with ConocoPhillips, said Rob Millhouse, an Australia-based spokesman for the UK gas producer. He declined to make any further comment on the company's bid for Origin Energy.

Source: Telegraph

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