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    Origin sells 10% stake in APLNG to EIG for A$2.12bn

Summary

Origin will continue to be responsible for upstream exploration, development, and production activities.

by: Shardul Sharma

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Origin sells 10% stake in APLNG to EIG for A$2.12bn

Origin Energy has signed an agreement with global energy investor, EIG, to sell a 10% stake in Australia Pacific LNG (APLNG) for A$2.12bn ($1.58bn), it said on October 25.

Following the sale's completion, the APLNG joint venture shareholders will comprise ConocoPhillips (37.5%), Origin (27.5%), Sinopec (25%) and EIG (10%). Origin will continue to be responsible for upstream exploration, development, and production activities. The downstream segment is operated by ConocoPhillips.

The project, which is located in Gladstone in Queensland, has a nameplate capacity of 9mn metric tons/year and holds a leading acreage position spanning the prolific Surat and Bowen basins.

“Divesting a 10% interest allows Origin to crystalise some of the significant value we have created in APLNG, while retaining upside to further value creation through a continuing substantial shareholding,” Origin CEO Frank Calabria said.

Origin has agreed it will guarantee EIG’s obligations to satisfy any future cash calls made by APLNG. An entity controlled by EIG will indemnify Origin in respect of the guarantee.

EIG in a separate statement said that the agreement represents the first-ever acquisition of an interest in an operational integrated LNG project by a private equity sponsor.

The transaction has received approval from the Australian Foreign Investment Review Board and is subject to the waiving of pre-emptive rights by ConocoPhillips and Sinopec, as well as other customary completion conditions.