Origin Energy has agreed to sell 10% interest in Australia Pacific LNG (APLNG) to global energy investor EIG Partners for $1.592bn.
The deal marks the world’s first involving a private equity acquiring a stake in an operating integrated LNG project, and its return to Australia after the stake sale in Senex Energy in 2019.
EIG expects the project, which operates at ‘globally competitive breakeven costs’, to provide it with a platform for global LNG growth in the future.
Under the deal, EIG will have the option to nominate one member to the APLNG board of directors, where Origin will retain its existing seats.
Moreover, Origin will continue its role as upstream operator for the APLNG, a coal seam gas (CSG) to LNG project.
Origin CEO Frank Calabria said: “Divesting a 10% interest allows Origin to crystalise some of the significant value we have created in Australia Pacific LNG, while retaining upside to further value creation through a continuing substantial shareholding.
“The material cash injection from this divestment provides further flexibility to deliver returns to shareholders and pay down debt, while allowing Origin to accelerate investment in growth opportunities.”
EIG has secured approval from the Australian Foreign Investment Review Board for the deal.
ConocoPhillips and Sinopec hold the rights to match EIG’s offer for Origin’s stake.
Australia Pacific LNG is a joint venture between Origin Energy (37.5%), ConocoPhillips (37.5%), and Sinopec (25%).
Commissioned in January 2016 in Gladstone, Queensland, the nine million tonnes per annum project is backed by long term supply contracts with Japan’s Kansai Electric and China’s Sinopec.