Cheung Kong Infrastructure is understood to have pulled out of the race to buy the $3.5 billion worth of infrastructure assets on offer from Shell’s Curtis Island LNG plant in Queensland.
The development sees IFM and GIP left in the competition, with final bids due on Friday.
IFM has been considered the frontrunner to buy the assets since late last year when it hired advisers RBC and Lazard.
The sales process by Shell was paused at the onset of the COVID-19 crisis, but reconvened around the middle of the year.
On offer has been a 26.25 per cent stake in the infrastructure assets of Shell’s QCLNG project.
Working with CKI has been Morgan Stanley.
CKI was expected to require a high level of certainty that it could gain approval from the Foreign Investment Review Board to buy the assets to remain in serious contention.
The successful buyer of the asset will receive a fixed annual cash income for 15 years that comes from fees for using the plant, which is not linked to the oil price, commodity prices or throughput.
The offering that is being sold through Rothschild is estimated to be worth about US$2.5bn.
Some believe that the contest will come down to what party has the cheapest cost of capital.
An ultimate competitor could be the owner Shell, given that many other companies may not be able to match its cost of capital.
For that reason, there is a chance that the energy giant could retain the assets.
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