AAP
Arrow Energy Ltd will own all of the $3 billion Fisherman's Landing project in Queensland after buying out its joint venture partner, Perth-based Liquefied Natural Gas Ltd (LNG Ltd).
Arrow will acquire LNG Ltd's subsidiary Gladstone LNG Pty Ltd for $51 million.
This includes options to acquire 12.5 million Arrow shares at an exercise price of $3.50 per share.
Shares in Arrow had gained four cents, or 1.18 per cent, to $3.44 at 1222 AEDT, while LNG Ltd shares had jumped 6.5 cents, or 9.35 per cent, at 76 cents.
LNG Ltd also will be paid $24 million once a final investment decision is made, a $US5 million ($A5.64 million) licensing fee for the use of its technology, and $24 million when the plant reaches a production rate of one million tonnes per annum (Mtpa).
When the plant reaches 3Mtpa through a second processing train, LNG Ltd will be paid $63.5 million.
"Arrow will also pay LNG Ltd a minium royalty of 0.7 per cent (capped at 0.9 per cent), calculated on the oil price differential above $US60/barrel for the first train," Arrow said in a statement on Thursday.
"Arrow is excited to be taking full control of the construction and future operation of the world's first CSG (coal seam gas) to LNG facility," Arrow chief executive Nick Davies said.
Arrow said the deal superseded an agreement between the two companies, announced last month, under which Arrow would have increased its equity participation in the project.
"This further simplification of the Fisherman's Landing LNG development and the elimination of the commercial agreements with LNG Ltd will improve the ability to construct, finance and ultimately allow for greater flexibility in the operation of the plant," Mr Davies said.
Arrow said it would assess the previously announced March 31 final investment decision date.
"At this stage, first LNG production is still expected in late 2012," Arrow said.
