On Dec. 9, BG Group Plc (LONDON: BG.L) said it will sell QCLNG Pipeline Pty Ltd., its wholly owned subsidiary, to APA Group (ASX: APA.AX) for about US$5 billion. APA Group is Australia’s largest gas infrastructure business, BG added.
BG Group will use the proceeds to reduce net debt and fund investment.
QCLNG Pipeline owns a 543-kilometer large-diameter underground pipeline network linking BG’s natural gas fields in southern Queensland to a two-train LNG export facility in Gladstone, on Australia’s east coast.
The pipeline, built between 2011 and 2014, has a current book value of US$1.6 billion. Tariffs payable on the pipeline will provide a fixed rate of return on the asset base.
For the year ended 31 Dec. 2016, the pipeline tariff is expected to yield EBITDA of about US$390 million to APA Group, BG said.
The sale is conditional on the start of commercial LNG deliveries (post-commissioning) from the Gladstone export facility and on partner consent, the company noted.
BG and its partners have firm capacity rights in the pipeline for 20 years, with options to extend.
Completion is scheduled for the first half of 2015, and is expected to yield about US$2.7 billion in post-tax profit.
QCLNG is scheduled to be held for sale in 2014’s fourth quarter, the company said.
London-based BG Group Plc is a multinational oil and natural gas company.
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