EIG, a leading institutional investor to the global energy and infrastructure sectors, has announced it will acquire a 10% interest in Australia Pacific LNG from Origin Energy for $1.592 billion.
This “innovative agreement” represents the first ever acquisition of an interest in an operational integrated LNG project by a private equity sponsor.
EIG described APLNG as the largest LNG project by liquefaction capacity on Australia’s eastern seaboard and a major supplier of LNG to Asia and gas to Australia’s domestic market.
“The Project, which is located in Gladstone, Queensland, has a track record of consistently achieving its nameplate capacity of 9.0 Mtpa and holds a leading acreage position spanning the prolific Surat and Bowen basins, providing long-life reserves. The Project operates at globally competitive breakeven costs and is well positioned to meet growing LNG demand in the Asia-Pacific region,” EIG said of the ConocoPhillips operated project.
Over the last fifteen years, EIG said it had invested in nine separate LNG projects located in six countries, and this latest acquisition represents a continuation of its strategy to gain exposure to high-quality LNG assets. The acquisition also builds on EIG’s investment presence in Australia and provides EIG with a platform for future growth in global LNG.
R. Blair Thomas, Chairman and CEO of EIG, said: “This is a groundbreaking transaction that reflects our strong confidence in the asset, our 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.”
Key Transaction Details
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 transaction has received approval from the Australian Foreign Investment Review Board and is subject to the waiving of pre-emptive rights by ConocoPhillips and Sinopec, as well as other customary completion conditions.
Morgan Stanley acted as EIG’s financial advisor in connection with this transaction and Allens Linklaters and Latham & Watkins acted as legal advisors.