Apache, a Houston-based producer of gas and oil for the domestic Western Australia market, has declared that the company will acquire a 65% interest in Burrup Holdings and plans to develop a technical ammonium nitrate (TAN) facility in the Burrup Peninsula locality of Western Australia that is to be developed by an association including Burrup Holdings.
The company has not disclosed the business terms of its planned acquisition of 65% interest of Burrup Holdings. Apache is looking forward to finish this transaction in either late January or early February of the year 2012.
The company will also negotiate to trade its interest in the TAN facility to Orica, a world distributor of mining explosives in Australia. TAN is an important raw material, which is currently used as a civil explosive in the industry, for porous ammonium nitrate + fuel oil (ANFO). An increasing demand for explosives-grade TAN was created in the niche industry by the fast-emerging iron ore market in the Pilbara region of Western Australia.
Since the TAN project started its production in 2006, the company has distributed the natural gas to Burrup fertilizers. The world’s biggest TAN facility will produce over 760,000 mt of ammonia every year, which contributes to about 6% of the whole world’s ammonia production.
G. Steven Farris, Chief Executive Officer and chairman of Apache, stated that the company has decided to offer its investment after a significant confusion over a year around the Burrup facility ownership, resulting in the plant’s stabilization and acquire a prolonged economically feasible demand for the production of natural gas in Western Australia. Farris added that the company will not operate the facility instead rely on the industry experts to operate the facility.