Queensland gas pipeline sells for $6 billion
A 543km pipeline linking gas fields in Queensland’s Surat Basin to an LNG export facility near Gladstone has sold for more than $6 billion.
Australia’s largest gas infrastructure company, the APA Group, will purchase the pipeline from the BG Group’s Queensland Curtis LNG business.
“It’s really just an expansion of our business,” said APA managing director Mick McCormack.
“It’s simply the size of the pipe that drives the price.”
Mr McCormack says the deal demonstrates the high value being placed on the east coast gas market, particularly as LNG exports from Gladstone ramp up in 2015.
Under the terms of sale, the BG Group will hold capacity rights over the pipeline for 20 years with options to extend further.
“The value of the pipeline is driven by how much BG are willing to pay in tariffs over the next 20 years,” said Mr McCormack.
APA expects tariff revenue in the 2016 calendar year of $464 million before interest, tax, depreciation and amortisation. Tariffs over the life of the contract will be tied to US inflation indices.
The steel pipeline can transport up to 1,510 terajoules of gas per day and consists of 46,200 sections stretching from production wells south-west of Dalby to the QCLNG plant on Curtis Island.
With final commissioning expected within weeks, the QCLNG project is the most advanced of the three LNG processing facilities under construction on the Island.
The pipeline transaction is conditional on the start of commercial LNG deliveries which are due in the first half of 2015.