Queensland pipeline gets Australian owners

queenA prominent Australian gas infrastructure business has sealed its largest-ever acquisition, paying US$5 billion for a newly-built pipeline network.

In a deal executed by Macquarie, Morgan Stanley and Deutsche Bank, APA Group purchased British company BG Group’s wholly-owned subsidiary QCLNG Pipeline – including its 543km QCLNG underground pipeline, which links gas fields in the Surat Basin to a two-train liquefied natural gas export
facility at Gladstone.

The sale, expected to be completed in the first half of 2015, remains conditional on partner consent and on the start of commercial LNG deliveries, post commissioning, from the QCLNG export facility at Gladstone.

BG Group said the sale was part of its plan to sell off non-core assets and previously said it would look to sell the pipeline before the end of 2014.

“The sale of the QCLNG pipeline is in line with our strategy to focus on BG Group’s core areas of oil and gas exploration and production and LNG,” BG Group interim executive chairman Andrew Gould said.

“The timing reflects QCLNG’s advanced stage of development; we are now on the verge of delivering the world’s first large-scale project using natural gas from coal seams as a feedstock for LNG.” BG Group said the transaction would result in about US$2.7 billion in post-tax
profit.

“The profit on disposal will be partly offset by a post-tax impairment of BG Group’s remaining QCLNG assets, expected to be around US$2 billion, following categorisation of QCLNG Pipeline as held for sale in the fourth quarter of 2014,” the company stated.
According to Commonwealth Bank, APA is working to expand its east coast pipeline network and revenue base, with the acquisition expected to contribute
additional earnings before interest, tax, depreciation and amortisation of US$383 million in the financial year ending 30 June 2016.