Two Australian energy heavyweights are set to merge in a move that will create a company worth $16 billion that will rank among the 20 biggest in the industry globally.

　　Oil Search today recommended an improved takeover offer by Santos that would value the company at some $6.2 billion, according to Reuters. Bloomberg noted that the deal would create a rival for Woodside in the liquefied natural gas space.

　　Per the terms of the deal, Oil Search shareholders would get 0.6275 new Santos shares for every Oil Search share they hold. This was the sweetened version of an earlier offer that gave Oil Search shareholders 0.589 Santos shares.

　　The deal would give Santos access to some of the world’s lowest-cost LNG production capacity via Oil Search’s participation in Exxon-led PNG LNG in Papua New Guinea.

　　In a statement, Santos said the merger would be “a regional champion of size and scale” with “a diversified portfolio of high quality, long-life, low-cost assets across Australia, Timor-Leste, Papua New Guinea and North America with significant growth optionality.”

　　The new company’s production this year would come in at some 116 million barrels of oil equivalent, Santos also said.

　　Oil Search holds a 29-percent stake in PNG LNG as well as a 22.8-percent interest in Papua LNG—a brownfield growth opportunity, according to the company. It also has a majority stake in the Pikka oil project in Alaska, which is the largest recent onshore oil discovery in the country.

　　The tie-up between Oil Search and Santos is the latest sign that the industry consolidation is not only limited to the United States and its shale patch. The changing environment in energy is prompting more companies to look for long-term business sustainability options through mergers and acquisitions.