3rd Jun 2015 14:33
LONDON (Alliance News) - Energy giant BG Group PLC Wednesday said it has completed the sale of its Australian gas infrastructure business to APA Group for total proceeds of USD4.6 billion, around USD400 million below the top of a guidance range it gave in the first quarter.
The deal, which resulted in BG selling its 543 kilometre pipeline network linking natural gas fields and the Queensland Curtis Liquefied Natural Gas export facility, had originally been announced in December, when BG said it would sell the assets for USD5.0 billion to APA, Australia's largest gas infrastructure business. It had given updated sale price guidance of between USD4.5 billion to USD5.0 billion in the first quarter.
BG said the reduction in proceeds compared with the original figure reflected the indexation movements to the long term tariff payable since the announcement in December.
The sale proceeds will be used to reduce net debt and to fund future growth investment, it said in a statement.
BG Group and its partners still have firm capacity rights in the pipeline for 20 years, with options to extend the deal.
Tariffs payable on the pipeline are set to provide a fixed rate of return on the asset base with the primary tariff components escalating annually with US inflation indices. On an annualised basis, the full pipeline tariff is approximately USD360 million.
BG shares were up 1.2% to 1,139.50 pence per share on Wednesday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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