Sydney gas utility AGL Ltd. has struck a deal to sell its 50% interest in the Moranbah Gas Project in north Queensland to privately owned Chinese gas distributer Shandong Order Gas Co. and Australian private investment company Orient Energy Pty. Ltd.
The selling price was not disclosed and the transaction is subject to preemptive rights by AGL’s joint venture partner Arrow Energy (also with 50% interest), which itself is a joint venture of Royal Dutch Shell PLC and PetroChina.
The deal also is subject to approval by Australian and Chinese regulatory authorities.
The Moranbah project is the earliest coal-seam gas project in Australia and has been producing CSG since September 2004.
It comprises producing gas fields in the Bowen basin of central-eastern Queensland, processing facilities (compression units, metering and monitoring equipment and a dehydration unit), transportation rights via the Moranbah-Townsville gas pipeline and gas contracts.
Key recipients of Moranbah gas are the Townsville power station, North Queensland copper and nickel refineries and fertilizer plants as well as the Moranbah power station.
The gas fields are about 140 km west of Mackay and 400 km south of Townsville.
AGL has been trying to sell its Moranbah assets for about 3 years in a bid to dispose of noncore assets.
Shandong Order Gas Co. supplies gas to about 7 million customers in China and has $5.5 billion in assets, $3 billion of which are energy assets according to AGL. The AGL buy is believed to be the company’s first entry into the Australian gas industry.
Although and Australian entity, Orient Energy is backed by Chinese investors.