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.
Recommended Reading
Energy Spectrum, UGI JV Buys Three Appalachia Gathering Systems
2025-01-28 - Pine Run Gathering LLC, a joint venture between Energy Spectrum Partners and UGI Corp., purchased three gathering systems in Pennsylvania from Superior Midstream Appalachian LLC.
Chord Drills First 4-Mile Bakken Well, Eyes Non-Op Marcellus Sale
2025-02-28 - Chord Energy drilled and completed its first 4-mile Bakken well and plans to drill more this year. Chord is also considering a sale of non-op Marcellus interests in northeast Pennsylvania.
Antero Stock Up 90% YoY as NatGas, NGL Markets Improve
2025-02-14 - As the outlook for U.S. natural gas improves, investors are hot on gas-weighted stocks—in particular, Appalachia’s Antero Resources.
Matador Touts Cotton Valley ‘Gas Bank’ Reserves as Prices Increase
2025-02-21 - Matador Resources focuses most of its efforts on the Permian’s Delaware Basin today. But the company still has vast untapped natural gas resources in Louisiana’s prolific Cotton Valley play, where it could look to drill as commodity prices increase.
Acquisitive Public Minerals, Royalty Firms Shift to Organic Growth
2025-04-04 - Building diverse streams of revenue is a key part of growth strategy, executives tell Oil and Gas Investor.