EIG, a leading institutional investor to the global energy and infrastructure sectors, today announced that it has entered into a definitive agreement under which it will acquire a 10% interest in Australia Pacific LNG Pty Limited (“APLNG” or the “Project”) from Origin Energy Limited (“Origin”) for an equity purchase price of $1.592 billion.
This innovative agreement represents the first ever acquisition of an interest in an operational integrated LNG project by a private equity sponsor.
Asset Highlights and Strategic Rationale
A tier-one, integrated LNG project with an established liquefaction facility, APLNG is the largest LNG project by liquefaction capacity on Australia’s eastern seaboard and a major supplier of LNG to Asia and gas to Australia’s domestic market. The Project, which is located in Gladstone, Queensland, has a track record of consistently achieving its nameplate capacity of 9.0 Mtpa and holds a leading acreage position spanning the prolific Surat and Bowen basins, providing long-life reserves. The Project operates at globally competitive breakeven costs and is well positioned to meet growing LNG demand in the Asia-Pacific region.
The Project is operated by ConocoPhillips (downstream operator) and Origin Energy (upstream operator) and maintains long-dated LNG contracts with two investment grade counterparties, Sinopec and Kansai Electric.
Over the last fifteen years, EIG has invested in nine separate LNG projects located in six countries, and this acquisition represents a continuation of its strategy to gain exposure to high-quality LNG assets. The acquisition also builds on EIG’s investment presence in Australia and provides EIG with a platform for future growth in global LNG.
R. Blair Thomas, Chairman and CEO of EIG, said, “This is a groundbreaking transaction that reflects our strong confidence in the asset, our partners, and the importance of LNG as a critical enabler of the energy transition. The transaction leverages EIG’s extensive experience in global LNG to deliver an attractive, steady stream of cash flows for our investors.”
Key Transaction Details
As part of the transaction, EIG will have the right to nominate one member to APLNG’s Board of Directors and will maintain customary shareholder rights and protections.
The transaction has received approval from the Australian Foreign Investment Review Board and is subject to the waiving of pre-emptive rights by ConocoPhillips and Sinopec, as well as other customary completion conditions.
Morgan Stanley acted as EIG’s financial advisor in connection with this transaction and Allens Linklaters and Latham & Watkins acted as legal advisors.
EIG is a leading institutional investor to the global energy and infrastructure sectors with $22.5 billion under management as of June 30, 2021. EIG specializes in private investments in energy and energy-related infrastructure on a global basis. During its 39-year history, EIG has committed over $38.0 billion to the energy sector through more than 373 projects or companies in 38 countries on six continents. EIG’s clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds in the U.S., Asia and Europe. EIG is headquartered in Washington, D.C. with offices in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul. For additional information, please visit EIG’s website at www.eigpartners.com.
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