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Origin Energy to sell 10% stake in its LNG joint venture for $2.1bn

Origin Energy to sell 10% stake in its LNG joint venture for $2.1bn
Origin Energy to sell 10% stake in its LNG joint venture for $2.1bn

Origin Energy, the top Australian energy organization, has reportedly struck a deal worth $2.1 billion for selling 10% stake in its Queensland-based large liquified natural gas (LNG) joint venture.

According to reports, Origin would maintain 27.5% of the Australia Pacific LNG (APLNG) merger after the formerly announced the sale to US-based energy investor EIG. Meanwhile, ConocoPhillips would keep 37.5% stake, with Sinopec, retaining 25%.

Frank Calabria, Origin’s chief executive, stated that Origin would receive a substantial cash influx from the sale of the 10% stake at a critical time, allowing it to deliver shareholder returns, pay down debt, as well as capture additional growth prospects.

As it appears, Origin spent another US$55 million (AU$73 million) last month to maintain its 20% interest in Octopus Energy, a fast-growing British energy supplier. The company also expressed a desire to expand investments for renewable energy projects.

Reportedly, Origin Energy experienced a loss of AU$ 2.2 billion for the fiscal year ended June 30. However, as per analysts, the APLNG deal will be a positive step for Origin in evolving operation conditions.

Calabria stated that Origin would keep its current seats on the Australia Pacific LNG board whereas EIG will be having one seat along with voting rights based on its 10% investment.

ConocoPhillips and Sinopec have preventative rights, meaning ConocoPhillips needs to be reassured that EIG is proficient in fulfilling its commitments withholding the Australia Pacific LNG Shareholders' Agreement with the advantage of Origin's supporting guarantee before the sale can be completed.

According to Origin, based on an estimated sale completion date of December 21, the company's net proceeds from the sale was projected to be $2 billion following the adjustments plus transaction expenses,.

Calabria expressed that the company looks forward to seeing how the newest partner to the joint venture, EIG, will contribute to the firm in the next years.

Source credit: https://www.smh.com.au/business/companies/origin-to-sell-10pc-stake-in-australian-lng-business-for-2-1b-20211025-p592sl.html

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Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.