Origin Energy agreed to sell the Darling Downs pipeline network to Jemena Gas Pipelines Holdings for A$392 million (US$291.5 million).
The transaction lifts sales from Origin’s asset divestment program started in September 2015 to A$1 billion, considerably higher than the original A$800 million target.
Located in Queensland, Darling Downs Pipeline Network is responsible for the transportation of gas to Origin’s Darling Downs power station, Australia Pacific LNG facility on Curtis Island and the domestic market.
Under the terms of the sale agreement, Origin has secured gas transportation services on the pipeline network for periods ranging from 10 to around 30 years.
Speaking of the agreement, Origin CEO Frank Calabria said the sale is scheduled to be completed by June 30, 2017, adding that proceeds from the divestment program will be used to reduce Origin’s debt.
“We’re on track to achieve our target of adjusted net debt of well below A$9 billion by June 30, 2017. In addition, we continue to make good progress on the divestment of Origin’s conventional upstream business, Lattice Energy, during calendar 2017,” Calabria said.
So far, as part of its divestment program, Origin sold the Mortlake terminal station, Mortlake gas pipeline, Cullerin Range wind farm, Stockyard Hill wind farm project and Origin’s 50 per cent interest in OTP Geothermal.
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