EIG pays $1.6b for 10% stake in Australia Pacific LNG

The asset, Australia Pacific LNG (APLNG), is a joint venture between Origin and ConocoPhillips, which own 37.5% each, and China’s Sinopec, which holds 25%. Origin’s holding will fall to 27.5%, although it will continue to serve as upstream operator, handling exploration, development, and production activities. ConocoPhillips is the downstream operator.

APLNG has the biggest liquefied natural gas (LNG) project on Australia’s eastern seaboard. It supplies the Queensland market as well as exporting into Asia, where Sinopec and Japan’s Kansai Electric Power are the major customers under long-dated contracts. The project consistently achieves its nameplate capacity of 9 million tons per annum.

Origin said in a filing that the proceeds of the sale would accelerate investment in growth opportunities. The company has been committing more resources to renewable energy – specifically wind and solar – with a view to having renewables and storage account for 25% of owned and contracted generation capacity by 2020.

For EIG, which has $22.5 billion in assets under management, the transaction represents a continuation of its strategy to gain exposure to high-quality LNG assets. Over the last 15 years, the firm has invested in nine LNG projects located in six countries.

“This is a groundbreaking transaction that reflects our strong confidence in the asset, our partners, and the importance of LNG as a critical enabler of the energy transition. The transaction leverages EIG’s extensive experience in global LNG to deliver an attractive, steady stream of cash flows for our investors,” said R. Blair Thomas, chairman and CEO of EIG, in a statement.

The deal has been approved by the Australian Foreign Investment Review Board and is subject to the waiving of pre-emptive rights by ConocoPhillips and Sinopec.

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• Topics
• Australasia
• Industrials
• Expansion
• Infrastructure
• Australia
• EIG Global Energy Partners
• energy
• Growth capital