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Origin to sell Queensland pipeline

By  Thursday, 18 May 2017 22:28
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Australian gas supplier Origin Energy has entered into an agreement with Jemena Gas Pipelines Holdings, to sell its Darling Downs pipeline network for AU$392 million.

Jemena is an energy infrastructure company jointly owned by State Grid Corp. of China and Singapore Power.

Origin said this transaction lifts sales from its asset divestment program announced in September 2015 to $1 billion, considerably higher than the original $800 million target.

Located in Queensland, the Darling Downs pipeline is responsible for the transportation of gas to Origin’s Darling Downs power station, the Australia Pacific LNG (APLNG) project and the domestic market.

Under the terms of the sale agreement, Origin has secured gas transportation services on the pipeline network for periods ranging from 10-30 years.

CEO Frank Calabria said the sale is scheduled to be completed by 30 June and puts the company on track to achieve adjusted net debt of well below $9 billion. 

“In addition, we continue to make good progress on the divestment of Origin’s conventional upstream business, Lattice Energy, during calendar 2017,” he added.

Last December, Origin announced its intention to divest its conventional upstream business – Lattice Energy - via initial public offering, to reduce debt and focus on its Energy Markets business and Integrated Gas business.

Lattice Energy includes the group’s gas projects in the Otway, Bass, Perth, Cooper, and Bonaparte basins in Australia, and stakes in the Kupe gas project and the Canterbury basin in New Zealand. Origin will retain its interests in APLNG, Ironbark and the Browse and Beetaloo basins.

During the March 2017 quarter, Origin recorded production of 79.7 PJe, a 31% increase on the corresponding period in FY2016. This was primarily driven by the commencement of production from APLNG’s second train. The project shipped 27 LNG cargoes during the period.

Revenue amounted to $562.9 million, a 78% increase year-on-year, due to higher production volumes and higher average commodity prices. 

Image: Origin 

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