By Robb M. Stewart
MELBOURNE, Australia--Origin Energy Ltd. (ORG.AU) has wrapped up its efforts to shed unwanted assets with an agreement to sell a natural-gas pipeline in eastern Australia for 392 million Australian dollars (US$290.8 million).
The agreement to sell the Darling Downs pipeline in Queensland state to Jemena Gas Pipelines Holdings brings the total raised with the sale of assets under a program unveiled in September 2015 to A$1 billion, which is A$200 million more than the original target.
The Darling Downs pipeline transports gas to Origin's Darling Downs Power Station, the Australia Pacific LNG gas-export project and the domestic market. As part of the sale agreement, Origin said it has secured gas-transport services on the pipeline for periods ranging from 10 to about 30 years.
Chief Executive Frank Calabria said the sale is expected to be completed by June 30, and puts the energy producer and retailer on track to achieving a targeting net debt of well below A$9 billion. The company continues to make progress on its planned exit from its conventional upstream assets, bundled in a company called Lattice Energy, this calendar year, he added.
Jemena--which is backed by State Grid Corp. of China and Singapore Power--owns a portfolio of energy and water transportation assets along Australia's east coast. It has been selected by the government of Northern Territory to build and operate an A$800 million pipeline that will transport natural gas from the remote north to Mount Isa in Queensland.
Write to Robb M. Stewart at [email protected]