BG Group has agreed to sell its Australian pipeline business for $5billion to the APA Group.
The subsidiary, QCLNG Pipeline, owns a 543 kilometre underground pipeline network which links BG group’s natural gas field in southern Queensland to a two-train export facility.
It was constructed between 2011 and 2014 and has a value of $1.6billion.
Andrew Gould, interim executive chairman of BG Group, said: “We are pleased to have entered into an agreement for the sale of this high-quality infrastructure with a bidder the calibre of APA Group.
“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.
“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 it expects the sale proceeds will be used to reduce net debt and to fund future growth investment.
In 2016, the pipeline tariff is expected to deliver to APA Group EBITDA of approximately US$390 million.
The sale is conditional on the start of commercial LNG deliveries from the QCLNG export facility at Gladstone and on partner consent.
BG Group and its partners have firm capacity rights in the pipeline for 20 years, with options to extend.