Origin Energy Sells Victoria Gas Pipeline for A$245 mn

As part of its asset disinvestment process, Origin Energy Limited on Friday announced it has sold Mortlake gas pipeline in Victoria for A$245 million.

The company entered into asset sales agreement with SEA Gas (Mortlake) Partnership.

“The sale of Mortlake pipeline demonstrates progress against our stated intention to generate at least A$800 million through asset divestments including non-operated upstream interests and other infrastructure assets,” Origin Managing Director, Grant King said.

Mortlake pipeline, which is currently operated by a related party of SEA Gas Mortlake, supplies gas to Origin’s Mortlake power station in Victoria. Origin has secured long-term gas transportation and storage services on the pipeline.

“This will help strengthen Origin’s balance sheet and build resilience in the business in a lower oil price environment” King said.

The sale of Mortlake Pipeline brings the cumulative proceeds of recent asset divestments to $$396 million when combined with the sale of Mortlake terminal station and Origin’s 50 per cent interest in OTP Geothermal Pte Ltd.

In September last year, Origin stated that in order to lower debt, strengthen the balance sheet and reduce reliance on distributions from Australia Pacific LNG, it plans to reduce the company’s dividend for FY2016 and FY2017, make further reductions in capital expenditure and sell non-core assets. 

Origin is in the process of selling its Perth Basin gas assets. According to Origin’s website, the Perth Basin assets include a stake in the producing Beharra Springs gas field as well as an interest in the Waitsia project.