French energy company Total SA (NYSE: TOT) said it has agreed to sell a 4% stake in its Australian Ichthys LNG project to Japanese partner Inpex Corp. for $1.6 billion, following cost overruns.
"This transaction is part of our constant portfolio review to optimize our capital allocation," Arnaud Breuillac, president of exploration and production at Total, said in a statement on Dec. 13. "Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase."
Breuillac, nevertheless, said Total remained committed to the Ichthys project and the French company would be holding on to its remaining 26% stake in Ichthys.
RELATED: Inpex Ships First LNG Cargo From Ichthys Project
Inpex has a majority stake of around 66% in the $40 billion project in northwestern Australia, which has seen multiple delays and significant cost overruns due to technical problems.
The project's other minority shareholders include CPC, Tokyo Gas Co. Ltd., Osaka Gas Co. Ltd., Kansai Electric Power Co., JERA Corp. and Toho Gas Co. Ltd.
RELATED: Total Wins Contracts For Two Offshore Blocks In Mauritania
At full operational capacity, Ichthys is expected to produce 8.9 million tonnes of LNG a year, along with about 1.7 million tonnes of LPG and about 100,000 barrels per day of condensate, an ultra-light form of crude oil.
Recommended Reading
Investing ‘Generationally’: The Family Office View of Oil and Gas
2024-07-25 - Key family offices, whose wealth developed from other industries, are filling in oil and gas investment gaps left by the flight of endowment and institutional capital from the space.
TC Energy Shareholders OK Spinning Off Liquid Pipelines Business
2024-06-04 - TC Energy will spin off South Bow Corp., with its primary asset the Keystone oil pipeline, while shifting a hefty amount of TC Energy’s debt to the new company.
Family Offices: Familiar and New Names Coming to Oil, Gas Table
2024-06-06 - Haynes and Boone semi-annual surveys of oil and gas lenders and producers reveal measured optimism capital formation—and a broader audience of family offices than seen in prior decades is tuning in.
Sector’s Appetite for Capital Remains Amid Consolidation Frenzy, Panelists Say
2024-05-17 - There’s still an appetite for capital in the oil and gas sector—companies just need to think creatively to find it, a number of panelists said during SUPER DUG in Fort Worth, Texas.
Regional Banks Take Advantage of Large Lenders’ Oil, Gas Hesitancy
2024-06-06 - Regional banks are picking up market share and rallying the U.S. upstream sector.