Shell inks US$2.5b Australian LNG stake sale to GIP

[BRISBANE] Royal Dutch Shell Plc agreed to sell a minority stake in a liquefied natural gas export project in Australia to Global Infrastructure Partners for US$2.5 billion.

The oil major will sell a 26.25 per cent interest in the Queensland Curtis LNG Common Facilities in a deal that is expected to be completed in the first half of 2021, the company said a statement on Monday. The common facilities are currently completely owned by Shell and include LNG storage tanks, jetties and infrastructure that service the venture.

A deal would reduce the oil giant's exposure to the turbulent market, while still remaining majority owner and operator in one of Australia's biggest LNG facilities. China's CNOOC Ltd. has a 50 per cent equity stake in one of the plant's production trains, while Tokyo Gas Co holds a 2.5 per cent equity in another one, according to Shell's website.

"This decision is consistent with Shell's strategy of selling non-core assets in order to further high-grade and simplify Shell's portfolio," Shell said in the statement.

It also comes after the Australian government has touted the gas industry as a key engine for nationwide growth out of this year's recession, even as energy prices have fallen and other major projects have been beset by holdups.

GIP is an infrastructure-focused fund manager with US$71 billion in assets, according to its website. It led a consortium comprising five other investment funds in a purchase of a US$10 billion stake in Abu Dhabi National Oil Co's natural gas pipelines in June.

BLOOMBERG