BG Group has sold off part of its American business in a £154million deal.
The natural gas firm said it has agreed to sell its entire 50% stake in gas production joint venture, TGGT, to Azure Midstream Energy for £143million.
BG Group will also receive an £11million stake in Azure – a Houston-based natural gas gathering and processing firm – which equates to a 4% equity holding.
The deal is expected to complete by the end of the year.
TGGT is a joint venture between BG Group and US gas exploration firm EXCO Resources. It owns and operates natural gas gathering and treating assets in shale gas formations across east Texas and north Louisiana.
BG Group said EXCO Resources will also sell its entire 50% holding in TGGT to Azure, under the same terms, in the same transaction.
A BG Group spokesman said: “BG Group’s sale of its interests in TGGT is aligned with a key strategic commitment to more actively manage its portfolio as the company focuses on its core strengths of exploration and production and LNG.
“Completion of the deal is expected by the end of the year, subject to relevant regulatory approval and other customary conditions.”
BG Group chief executive Chris Finlayson hinted at potential sell-offs earlier this year when he announced that they would focus on being an LNG company
“In a period where LNG demand is expected to grow twice as fast as overall gas demand, with underlying supply needing to grow by nearly 9% to meet total demand, BG Group is well positioned to capitalise on this growing market through our competitive advantages of world-class exploration and a distinctive LNG business, facilitated by our commercial agility,” he told investors in May.
“While we expect LNG demand to grow, our exposure to oil is also increasing through our outstanding portfolio in Brazil.
“We are making good progress with the execution of the programme and, as our knowledge of these giant fields grows, we expect further development phases to accelerate production and increase recovery, significantly increasing the value of the assets.
“In order to deliver successfully on this, we will manage our portfolio more actively, employing simple processes with clear accountabilities, while remaining lean and suitably resourced.”
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