Origin to sell interest in APLNG

Origin Energy has agreed to sell 10 per cent of its shareholding in Australia Pacific LNG (APLNG) to global energy investor, EIG, for $2.12 billion. 

The APLNG joint venture shareholders will be ConocoPhillips with 37.5 per cent, Origin with 27.5 per cent, Sinopec with 25 per cent and EIG with 10 per cent at the completion of the sale.  

The sale will not change Origin’s role as upstream operator and it will retain its existing seats on the APLNG board. EIG will have one board seat, with voting rights corresponding to its 10 per cent shareholding. 

Origin chief executive officer (CEO) Frank Calabria said Origin will continue its important role as upstream operator of the world class Australia Pacific LNG asset.

“Divesting a 10 per cent interest allows Origin to crystallise some of the significant value we have created in Australia Pacific LNG, while retaining upside to further value creation through a continuing substantial shareholding,” he said. 

EIG chairman and CEO Blair Thomas said this is a ground-breaking transaction that reflects its strong confidence in the asset, its 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,” he said.

Over the last fifteen years, EIG has invested in nine separate LNG projects located in six countries, with this acquisition representing a continuation of its strategy to gain exposure to high-quality LNG assets.

This agreement is the first acquisition of an interest in an operational integrated LNG project by a private equity sponsor. As part of the transaction, EIG will have the right to nominate one member to APLNG’s board of directors and will maintain customary shareholder rights and protections.

The APLNG is located in Gladstone, Queensland, and operates at globally competitive breakeven costs and is well positioned to meet growing LNG demand in the Asia-Pacific region.  

The completion of sale is estimated to be 31 December 2021.