Origin Energy Announces Sale of Mortlake Pipeline

Source Press Release
Company SEA Gas (Mortlake) PartnershipOrigin Energy Limited 
Tags Asset Deals, Deals, Pipelines/ tankers/ distribution
Date May 20, 2016

Origin Energy Limited (Origin) today announced it had entered into an Asset Sale Agreement with SEA Gas (Mortlake) Partnership (SEA Gas Mortlake) for the sale of Mortlake Pipeline for cash consideration of $245 million.  

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.

The planned sale of Mortlake Pipeline represents a 14.4x FY2017 EBITDA multiple to Origin1.

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

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

The sale of Mortlake Pipeline brings the cumulative proceeds of recent asset divestments to $396 million2 when combined with the sale of Mortlake Terminal Station and Origin’s 50 per cent interest in OTP Geothermal Pte Ltd.

The transaction is subject to customary conditions and is expected to be completed after 30 June 2016.

1Multiple based on the incremental earnings impact to Origin of the newly contracted transport and storage services net of saved operating expenditure

2Includes proceeds from OTP sale of US$30 million converted at an exchange rate of AUD/USD of 0.73

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd