US investment fund Global Infrastructure Partners buys Shell’s Queensland LNG infrastructure
Global Infrastructure Partners has beaten Australia’s IFM Investors to buy energy giant Shell’s Queensland LNG infrastructure.
US investment fund Global Infrastructure Partners has beaten Australia’s IFM Investors to buy energy giant Shell’s Queensland LNG infrastructure for $US2.5bn ($3.3bn).
The deal will see GIP grab a 26.25 per cent stake in infrastructure owned by Shell at its QCLNG export plant in Gladstone, leaving the European major with a 73.75 per cent share of the facilities.
The $US71bn GIP was in a two-horse race with the $148bn IFM Investors who continue to scour a raft of infrastructure opportunities on behalf of their superannuation fund owners. While there was little to separate the offers, Shell opted for GIP which also holds existing stakes in the Port of Brisbane and Port of Melbourne along with rail hauler Pacific National.
GIP will acquire a stake in Shell’s LNG storage tanks, jetties and operations infrastructure that services QCLNG‘s two gas export trains at the state’s Curtis Island.
“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 a statement. ”The sale will contribute to Shell’s expected divestment proceeds, without impact on people or the operations of the QCLNG venture, and aligns Shell’s interest in the Common Facilities with its 73.75 per cent interest in the overall QCLNG venture.”
Shell, which supplies 16 per cent of Australia‘s east coast gas demand, owns 73.75 per cent of QCLNG with China’s CNOOC holding a 25 per cent stake and Tokyo Gas the remaining 1.25 per cent.
The QCLNG facility produces 8.5m tonnes of LNG a year for export markets.
Investors have also been querying whether the two other Queensland LNG operators - the Origin-led APLNG and Santos’s GLNG - may look to follow Shell with a similar selldown of their infrastructure positions.
Origin has not ruled out considering such a move but said it would need to find alignment with its APLNG joint venture partners ConocoPhillips and Sinopec.
“It is something we consider from time to time with the joint venture but it really is a joint venture decision,” Origin chief executive Frank Calabria said at its annual investor day on November 26. “So we’re not completely in control of that but we work constructively with them.”
Strong export volumes from Queensland have helped put Australia on track to hit record LNG exports this year, retaining its status as the world‘s biggest gas shipper, although revenues remain sluggish due to the crash in energy prices.
Exports may reach 78m tonnes in 2020, according to consultancy EnergyQuest, eclipsing last year‘s 77.5m tonne total and surpassing Qatar at 77m tonnes.
Still, Australia will next year relinquish that status with a forecast cut in supplies to 75m tonnes in 2020-21, handing the top producer spot to Middle East rival Qatar, federal government figures released on Monday estimate.
The decline reflects both ongoing effects from pandemic-linked demand but also a raft of technical issues at Chevron’s Gorgon LNG plant and the Shell-led Prelude gas export facility.
Revenues will also take a hit due to the crash in energy prices, decreasing 35 per cent to $31bn this year from $48bn in 2019-20. A recovery will take place the following year with income rising back to $37bn in 2021-22.