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Anadarko to Sell Bear Head LNG Project for $125M

Anadarko Petroleum Corp. has agreed to sell Bear Head LNG Corp., a subsidiary that is developing a liquefied natural gas (LNG) receiving terminal at Point Tupper, NS. The sale follows the company's decision last month to sell Anadarko Canada Corp. (see Daily GPI, June 29).

Under the agreement with private equity firm U.S. Venture Energy, Anadarko will receive $125 million for the Bear Head project and hold an 18-month option to secure up to 350 MMcf/d of throughput capacity at competitive rates. The option period begins once the transaction closes.

"With the sale, we are recovering our investment and a reasonable premium, while retaining the ability to supply LNG to the Canadian Maritimes and U.S. Northeast consuming regions," Anadarko Senior Vice President Karl Kurz said in a statement.

"From the beginning, Anadarko pursued Bear Head as a means to commercialize international natural gas resources," Kurz said. "We committed to our investors that we would either secure an upstream supply source or would explore other options with our terminal within a two-year period. With this agreement, we retain the upstream opportunity in the near term without owning and operating the LNG terminal."

Kurz added that the decision "also is consistent with our recent announcement of plans to divest our Anadarko Canada subsidiary, with proceeds to be used to retire debt associated with the pending acquisitions of Kerr-McGee and Western Gas Resources" (see Daily GPI, June 26).

Anadarko took over the Bear Head project when it purchased Access Northeast Energy Inc. (ANEI), a private Canadian company, in 2004 (see Daily GPI, Aug. 13, 2004). At the time, Anadarko officials noted that the company was exploring for and producing oil in Algeria and Qatar, two of the world's top LNG exporting countries. Anadarko said two years ago it planned to use the Bear Head regasification terminal as a leveraging vehicle for other upstream natural gas opportunities.

The sale to U.S. Venture Energy includes all assets, rights and obligations associated with the Bear Head project, excluding long-term pipeline transportation agreements. The sale is expected to close within a few weeks, subject to normal and customary conditions. Anadarko said it plans to work closely with U.S. Venture Energy during the transition.

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