Origin Energy, ConocoPhillips Form Australia Pacific LNG Joint Venture
Origin Energy has announced the completion of the transaction with ConocoPhillips to form Australia Pacific LNG, a coal seam gas-to-liquefied natural gas joint venture, with Origin receiving an upfront payment of $5 billion from ConocoPhillips.
Australia Pacific LNG intends to develop coal seam gas (CSG) reserves base into a 14-million-tonne-per annum CSG to liquefied natural gas (LNG) project. The project will deliver an additional Australian LNG hub, serving Asia-Pacific and other international markets.
Final investment decision for Train-1 of the project is expected at the end of 2010 and Australia Pacific LNG is targeting first LNG production in 2014.
Grant King, Origin’s managing director, said: “This is a company transforming transaction. Origin will become, in its joint venture with ConocoPhillips, the largest CSG-to-LNG producer in Australia. Our unparalleled Queensland CSG resources will now be developed more quickly and the resultant LNG will have viable channels to global markets.
“Origin now has no net interest bearing debt and a significant cash balance. This strong financial position will facilitate a decade of growth for Origin in the dynamic and developing resource and energy sectors.”