BG Group Sells Queensland Gas Pipeline to APA Group

BG Group on Wednesday said it has agreed to sell its wholly-owned subsidiary QCLNG Pipeline Pty Ltd to Australia’s APA Group for about $5 billion.

QCLNG Pipeline Pty Ltd owns a 543 kilometre, large-diameter underground pipeline network linking BG Group's natural gas fields in southern Queensland to a two-train liquefied natural gas (LNG) export facility at Gladstone on Australia's east coast.

The sale of this non-core infrastructure is consistent with BG Group's strategy of actively managing its global asset portfolio, the company said.

The pipeline was constructed between 2011 and 2014 and has a current book value of $1.6 billion.

The sale is conditional on the start of commercial LNG deliveries (post commissioning) from the QCLNG export facility at Gladstone and on partner consent. BG Group and its partners have firm capacity rights in the pipeline for 20 years, with options to extend.

The transaction is expected to be complete in the first half of 2015.

BG Group expects the sale proceeds will be used to reduce net debt and to fund future growth investment.

"The sale of the QCLNG pipeline is in line with our strategy to focus on BG Group's core areas of oil and gas exploration and production and LNG. The timing reflects QCLNG's advanced stage of development; we are now on the verge of delivering the world's first large-scale project using natural gas from coal seams as a feedstock for LNG," Andrew Gould, interim Executive Chairman of BG Group, commented.