BY Fraser Tennant
Marking the launch of a strategy to build a diversified, global integrated liquified natural gas (LNG) company, MidOcean Energy, a unit of private equity firm EIG, is to buy four Australian LNG projects from Tokyo Gas Co., Ltd in a transaction valued at $2.15bn.
The acquisition will see EIG acquire Tokyo Gas’ interests in Gorgon LNG, Ichthys LNG, Pluto LNG and Queensland Curtis LNG – integrated projects that span Australia’s western and eastern seaboard and are major suppliers of LNG to Asia.
The Tokyo Gas portfolio is expected to generate approximately 1 million tonnes per annum of LNG net to MidOcean, production that is underpinned by long-life reserves and a globally competitive cost structure.
The transaction is also in line with the Tokyo Gas Group’s Management Vision, ‘Compass 2030’, where Tokyo Gas continues to demonstrate leadership in the transition to net-zero CO2 emissions.
“Since 2003, our company has participated in five Australian LNG projects and expanded its business holdings in upstream LNG interests,” said Tokyo Gas in a statement. “Four of those projects, excluding the Darwin LNG project, will be transferred to MidOcean. “Under the Compass Action plan, our company will review its asset portfolio in order to allocate resources to growth areas.”
Tokyo Gas, Japan's biggest city gas supplier, did not disclose the terms of the transaction.
“The launch of MidOcean reflects our deep belief in LNG as a critical enabler of the energy transition and the growing importance of LNG as a geopolitically strategic energy resource,” said Blair Thomas, chairman and chief executive of EIG. “We believe this transaction provides MidOcean with a foundational portfolio of cost-advantaged integrated LNG assets in a low-risk jurisdiction, ideally positioned to supply key customers in Japan, Asia and across the globe for decades to come.”
During its 40-year history, EIG has committed over $41.5bn to the energy sector through over 387 projects or companies in 38 countries on six continents. EIG’s clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds in the US, Asia and Europe.
The transaction is expected to close in the first half of 2023, subject to customary closing conditions, including Australian regulatory approvals.
De la Rey Venter, chief executive of MidOcean, concluded: “We see a number of opportunities to further expand MidOcean’s position in supplying LNG markets around the world and look forward to working with our new partners and customers.”
News: EIG unit to buy Tokyo Gas's stakes in Australian LNG projects for $2.15 billion