Total to Sell Part of Ichthys LNG Stake for $1.6B

Total to Sell Part of Ichthys LNG Stake for $1.6B
Total signs an agreement to divest a 4% interest in the Ichthys LNG project in Australia.

Total announced Thursday that it has signed an agreement to divest a four percent interest in the Ichthys liquefied natural gas (LNG) project in Australia to Inpex for an overall consideration of $1.6 billion.

The transaction, which is subject to Australian regulatory approvals, would reduce Total’s interest in the asset to 26 percent. Inpex’s stake in the project would rise to 66.245 percent.

“This transaction is part of our constant portfolio review to optimize our capital allocation. Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase,” Arnaud Breuillac, president of exploration and production at Total, said in a company statement.

“The final CAPEX estimate provided by the operator is around $45 billion to be compared to an updated figure around $40 billion in 2017. In line with our capital discipline policy, we have therefore decided to control our capital employed in Ichthys by monetizing a four percent stake after the project start-up and de-risking,” he added.

“We are of course committed to the Ichthys project with our remaining 26 percent interest contributing to our growth both in production and cash flow from 2019 and beyond. LNG is a core area for Total,” Breuillac continued.

In a statement posted on Inpex’s website on Thursday, Inpex said the Ichthys LNG project “is a highly competitive one that is expected to generate stable revenue over the long term”.

“Inpex’s acquisition of additional participating interest in the project is aligned to the company’s pursuit of its business targets outlined in ‘Vision 2040’ and ‘Medium-term Business Plan 2018 – 2022’ announced in May 2018,” Inpex added.

“Inpex will continue to work toward achieving stable production and an early ramp-up at the Ichthys LNG project with the understanding and cooperation of all its stakeholders, including the project’s joint venture partners, the local communities, the Australian federal government and the governments of Western Australia and the Northern Territory,” Inpex continued.

Inpex officially opened the Ichthys LNG onshore facilities last month. The project commenced shipment of condensate Oct. 1 and LNG Oct. 22.

The Ichthys LNG project is led by Inpex, which currently owns a 62.245 percent operated interest. Total currently has a 30 percent interest.


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