US-based Apache Energy late last night confirmed it had reached a deal to sell its 13 per cent interest in the Wheatstone LNG project, near Onslow in Western Australia, and a 50 per cent stake the Kitimat LNG project in western Canada, to Woodside (WPL) for $US2.75bn and around $US1bn in reimbursed expenditure.

Woodside’s investments in the two projects come despite a sharp downturn in oil prices, which have fallen by more than 40 per cent in the past six months. Most LNG sales contracts are linked to the price of oil, and the slump in the oil price has fed concerns that new and proposed LNG projects may be uneconomic in the current environment.

While the deal had been widely anticipated, the final agreement did not include any acquisition by Woodside of Apache’s small but profitable suit of producing oil and gas assets in WA.

The acquisitions will help fill a gap in Woodside’s development pipeline that has loomed large since the company commissioned its Pluto LNG plant in WA in 2012.

The $US29bn Wheatstone project, which is currently halfway through construction, will produce around 8.9m tonnes a year of LNG after it begins production in 2016.

Kitimat is less advanced and represents a longer term option for Woodside to enter the North American LNG export industry.

Prior to the recent oil price plunge, investors had been wary about the lack of growth options in the Woodside portfolio, which was extracting existing reserves faster than it was identifying new reserves.

The acquisition marks a defining moment for the company under chief executive Peter Coleman, who has been trying to find suitable investment options for the company’s growing cash pile.

Since taking over the reins in 2011 from Don Voelte, Mr Coleman’s time at the helm has been punctuated by aborted transactions and project deferments. A deal to acquire a major stake in the Leviathan LNG project in Israel collapsed earlier this year after the project partners demanded a higher price, while Woodside was forced to scale back a proposed deal that would have seen major shareholder Royal Dutch Shell substantially exit its position after its plan failed to garner sufficient shareholder support.

Mr Coleman has also overseen a decision to walk away from a proposed development of an LNG plant at James Price Point, north of Broome, after its estimated capex budget more than doubled, while he has also indefinitely deferred plans for an expansion of capacity at Pluto.

Apache has come under pressure from activist shareholders in recent months to sell off its non-core assets and refocus on its suite of fields in North America.

Apache chairman and chief executive Steven Farris said in a statement that the proceeds of the sale would be used to reduce debt, repurchase shares and consider acquisitions that “enhance” the company’s asset base.

“Today’s announcement marks the successful completion of one of our primary strategic goals of exiting the Wheatstone and Kitimat LNG projects. Apache recognises the contribution of our employees who have worked so diligently on these projects since their inception, and we sincerely thank them for their tremendous effort,” Mr Farris said.

“I would also like to thank Woodside’s CEO and managing director, Peter Coleman, and his entire staff for their hard work and professionalism in bringing this transaction to a successful conclusion. I am proud of Apache’s legacy in advancing the Wheatstone and Kitimat LNG projects, and I am confident that Woodside’s participation will have a positive impact in seeing these world-class LNG facilities through to first production.”

Shares in Woodside closed up 2.3 per cent to $35.39 yesterday. They had traded as high as $44.14 back in August.