MidOcean Energy agreed on Oct. 7 to acquire interests in a portfolio of Australian integrated LNG projects for $2.15 billion cash, marking the launch of the “pure play” integrated LNG company backed by EIG.
“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,” R. Blair Thomas, EIG’s chairman and CEO, commented in a release
EIG formed and manages MidOcean Energy to build a high-quality, diversified, global “pure play” integrated LNG company by leveraging EIG’s experience in the global LNG sector, which is underpinned by several billion dollars of commitments made by the institutional investor to multiple LNG projects over the past 20 years.
In June, EIG announced that LNG veteran De la Rey Venter, formerly with Shell, joined MidOcean as CEO, bringing 25 years of experience in global LNG operating, dealmaking and business leadership.
“With today’s announcement,” Venter said in the Oct. 7 release, “MidOcean is taking the first step toward realizing its vision to build a material pure play LNG business that we expect will support the world’s transition to a net-zero future.”
The acquisition on Oct. 7 included the purchase of Tokyo Gas Co. Ltd.’s interests in a portfolio of four Australian integrated LNG projects—Gorgon LNG, Ichthys LNG, Pluto LNG and Queensland Curtis LNG.
The integrated projects span Australia’s western and eastern seaboard and are major suppliers of LNG to Asia, with a diverse set of long-dated take or pay contracts with investment-grade counterparties, and to Australia’s domestic gas markets, according to the release.
“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,” Thomas said of the acquisition.
The 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 portfolio also benefits from experienced operators, including Chevron, INPEX, Woodside and Shell, and spans the LNG value chain from upstream operations to midstream, liquefaction and sales.
“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,” Venter added.
The transaction is expected to close in first half of 2023, subject to customary closing conditions, including Australian regulatory approvals. Barrenjoey, Barclays and JP Morgan acted as EIG’s financial advisers in connection with the transaction. White & Case acted as EIG’s legal adviser.
During its 40-year history, EIG has committed over $41.5 billion to the energy sector through over 387 projects or companies in 38 countries on six continents. The firm currently has $24 billion under management as of June 30.
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