Origin Energy Limited (Origin) today announced it had entered into an agreement with Jemena Gas Pipelines Holdings Pty Ltd (Jemena) for the sale of Darling Downs Pipeline Network for $392 million. The transaction lifts sales from Origin’s asset divestment program announced in September 2015 to $1 billion, considerably higher than the original $800 million target.
Located in Queensland, Darling Downs Pipeline Network is responsible for the transportation of gas to Origin’s Darling Downs Power Station, Australia Pacific LNG and the domestic market. Under the terms of the sale agreement, Origin has secured gas transportation services on the pipeline network for periods ranging from 10 to around 30 years.
Origin CEO Frank Calabria said, “The sale of Darling Downs Pipeline Network, which represents a 16.9x FY2018 EBITDA multiple1 to Origin, is scheduled to be completed by 30 June 2017. The sale culminates our announced asset divestment program, the net proceeds of which will be used to reduce debt.
“We’re on track to achieve our target of adjusted net debt of well below $9 billion by 30 June 2017. In addition, we continue to make good progress on the divestment of Origin’s conventional upstream business, Lattice Energy, during calendar 2017,” Mr Calabria said.
Assets sold as part of Origin’s announced divestment program included Mortlake Terminal Station, Mortlake Gas Pipeline, Cullerin Range Wind Farm, Stockyard Hill Wind Farm project and Origin’s 50 per cent interest in OTP Geothermal.
1Multiple based on the incremental earnings impact to Origin of all firm contracted transport services net of saved operating expenditure.
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