Total sells Ichthys LNG stake to Inpex for $1.6 billion

LNG vessel Pacific Breeze loading first Ichthys LNG cargo (Image courtesy of Inpex)

French energy major Total has signed a deal to divest a 4 percent stake in the Ichthys liquefied natural gas (LNG) export project in Australia to Inpex for $1.6 billion.

Japan’s Inpex is the operator of the giant LNG export project that started shipping the fuel in October.

The transaction, which is subject to Australian regulatory approvals, reduces Total’s interest in the asset to 26 percent.

“This transaction is part of our constant portfolio review to optimize our capital allocation. Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase,” Arnaud Breuillac, President, Exploration & Production at Total said in a statement on Thursday.

“The final CAPEX estimate provided by the operator is around $45 billion to be compared to an updated figure around $40 billion in 2017. In line with our capital discipline policy, we have therefore decided to control our capital employed in Ichthys by monetizing a 4 percent stake after the project start-up and de-risking,” he said.

“We are of course committed to the Ichthys project with our remaining 26 percent interest contributing to our growth both in production and cash flow from 2019 and beyond. LNG is a core area for Total – the world second-largest privately owned player with a strong pipeline of low breakeven pre-FID projects in our portfolio,” Breuillac added.

At full capacity, the Ichthys offshore facilities and the two-train onshore liquefaction plant located at Blaydin Point near Darwin will supply 8.9 million tons per year of LNG and 1.65 Mt/y of liquefied petroleum gas (LPG), along with 100,000 barrels of condensate per day.

The first LNG cargo was exported on the October 22nd 2018, the first offshore condensate cargo was exported on October 1st 2018, and the first LPG cargo was exported on the November 16th 2018. The two LNG trains are now fully operational.

Besides Inpex and Total, join venture partners in the LNG export project are Taiwan’s CPC Corporation and the Australian subsidiaries of Tokyo Gas, Osaka Gas, Kansai Electric, Chubu Electric Power and Toho Gas.

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