EIG-backed MidOcean Energy has struck a deal to buy Tokyo Gas’ stakes in four Australian LNG projects, for $2.15 billion in cash.
In particular, MidOcean will buy stakes in Gorgon LNG, Ichthys LNG, Pluto LNG and Queensland Curtis LNG. This will provide the EIG-backed company with 1 million tonnes per year of LNG net.
This is MidOcean’s first step in its efforts to become a pure play integrated LNG company. MidOcean expects the deal to close by mid-2023, while Tokyo Gas said it would come after March.
“The launch of MidOcean reflects our deep belief in LNG as a critical enabler of the energy transition and the growing importance of LNG as a geopolitically strategic energy resource,” said EIG chairman and CEO R Blair Thomas.
“We believe this transaction provides MidOcean with a foundational portfolio of cost-advantaged integrated LNG assets in a low-risk jurisdiction, ideally positioned to supply key customers in Japan, Asia and across the globe for decades to come.”
De la Rey Venter joined MidOcean as CEO in June this year, from Shell. Venter said the deal with Tokyo Gas was “the first step toward realising its vision to build a material pure play LNG business that we expect will support the world’s transition to a Net Zero future. We see a number of opportunities to further expand MidOcean’s position in supplying LNG markets around the world and look forward to working with our new partners and customers.”
Tokyo Gas has 5% in Pluto LNG, 1% in Gorgon LNG, 1.25% in QC LNG and 1.575% in Ichthys LNG.
EIG bought into the GNL Quintero regas terminal in Chile under a deal announced in March this year.
On the compass
The deal will also support Tokyo Gas’ plans for the future, under its Compass 2030 project. This aims to achieve net zero by 2050.
Under Compass 2030, “our company will review its asset portfolio in order to allocate resources to growth areas. This transfer is based on this strategy,” the Japanese company said.
The deal does not include Tokyo Gas’ stake in Darwin LNG. The Japanese company said the sale would have no impact on its LNG procurement work.
Barrenjoey, Barclays and JP Morgan acted as EIG’s financial advisors in connection with this transaction and White & Case acted as EIG’s legal advisor.