BG Group agrees to sell QCLNG Pipeline for USD 5B

BG Group announced that it has agreed to sell its wholly owned subsidiary QCLNG Pipeline to APA Group, Australian gas infrastructure business, for approximately USD 5.0B.

QCLNG Pipeline owns a 543km large-diameter underground pipeline network linking BG Group’s natural gas fields in southern Queensland to a two-train liquefied natural gas (LNG) export facility at Gladstone on Australia’s east coast. The sale of this non-core infrastructure is consistent with BG Group’s strategy of actively managing its global asset portfolio.

Photo courtesy of BG Group

The pipeline was constructed between 2011 and 2014 and has a current book value of USD 1.6B. Tariffs payable on the pipeline are set to provide a fixed rate of return on the asset base with the primary tariff components escalating annually with US inflation indices. The sale is conditional on the start of commercial LNG deliveries (post commissioning) from the QCLNG export facility at Gladstone and on partner consent. BG Group and its partners have firm capacity rights in the pipeline for 20 years, with options to extend.

Andrew Gould, interim executive chairperson of BG Group, commented: “The timing [of the sale] reflects QCLNG’s advanced stage of development; we are now on the verge of delivering the world’s first large-scale project using natural gas from coal seams as a feedstock for LNG.”

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