Hurdle remains for mega deal in Asian LNG market

PORT MOSEBY, Papua New Guinea, Sept. 28 (UPI) -- A company with a strong position in the Asia-Pacific market for liquefied natural gas said it was waiting for a court decision before merging with Exxon Mobil.

InterOil said it was waiting for a court to review objections to the planned merger.

"Completion of the transaction prior to the end of September would require issuance of a final order no later than the close of business on Thursday," the company said in a statement. "Exxon Mobil and InterOil intend to close the transaction promptly after the final order is obtained"

Exxon emerged the victor after rival Oil Search Ltd. dropped out of the bidding process for InterOil in July. Exxon countered a bid backed by French energy company Total with a $2.2 billion offer. More than 80 percent of the InterOil shareholders voted in favor of the proposed transaction Sept. 21.

InterOil's sole focus is on the natural gas in Papua New Guinea. It said its holdings in the Elk-Antelope field there is on one of the largest undeveloped gas fields in Asia.

Exxon offered a set payment for each trillion cubic-foot equivalent of resources in the Elk-Antelope basin in Papua New Guinea, subject to a cap of 10 trillion cubic feet.

For its part, Oil Search in early September said it grabbed a tighter hold over license areas off the coast of Papua New Guinea after acquiring a 40 percent stake from a subsidiary of CNOOC Ltd., China's largest producer of offshore crude oil and natural gas, for an undisclosed sum.

Oil Search said Exxon, which also acquired a 40 percent stake in the area in question, will take over as the operator of the license areas in the deep waters off the coast of Papua New Guinea.

Construction of a facility for LNG in Papua New Guinea began in 2010. The facility is expected to produce more than 9 trillion cubic feet of natural gas over its 30-year lifespan. The country, meanwhile, is positioned well to take advantage of the growing energy demands from economies in the Asia-Pacific region.

The Asian Development Bank last year cautioned that Papua New Guinea's growth prospects dwindle, however, as the "one-off boost" for LNG exports fades from the country's economy.