Apache Buys Stake In Australian Ammonium Producer, Plans New Plant

Apache Corp. (APA) said Monday it acquired 65% of Burrup Holdings Ltd. from Australia & New Zealand Banking Corp. (ANZ.AU) for an undisclosed sum, and that it plans to build a technical ammonium-nitrate plant in Western Australia state.

The U.S. company said it is also negotiating to sell most of its interest in the plant to mining explosives maker Orica Ltd. (ORI.AU).

Apache has supplied natural gas to Burrup Fertilisers since its existing plant, which cost A$700 million to build, commenced production in 2006. With an annual production capacity of 760,000 metric tons, the plant is one of the world's largest, producing 6 percent of the total global output of tradable ammonia.

"After a year of significant turmoil surrounding the Burrup plant ownership, Apache decided to make this investment in order to stabilize the project and secure a long-term economically viable market for our natural gas production in Western Australia," Apache Chief Executive G. Steven Farris said in a statement.

ANZ in late 2010 named receivers to help recover debts from Burrup Fertilisers. The bank had about A$800 million in loans to the Indian-based Oswal Group Global, which had owned the 65% stake.

 
   -By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; [e-mail]