Origin Energy has entered into an agreement with Jemena Gas Pipelines Holdings for the sale of Darling Downs Pipeline Network for A$392 million. The transaction lifts sales from Originís asset divestment program announced 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 Originís Darling Downs Power Station, Australia Pacific LNG 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.
Origin CEO Frank Calabria said: 'The sale of Darling Downs Pipeline Network, which represents a 16.9x FY2018 EBITDA multiple to Origin, is scheduled to be completed by 30 June 2017. The sale culminates our announced asset divestment program, the net proceeds of which will be used to reduce debt. Weíre on track to achieve our target of adjusted net debt of well below $9 billion by 30 June 2017. In addition, we continue to make good progress on the divestment of Originís conventional upstream business, Lattice Energy, during calendar 2017.'
Assets sold as part of Originís announced divestment program included Mortlake Terminal Station, Mortlake Gas Pipeline, Cullerin Range Wind Farm, Stockyard Hill Wind Farm project and Originís 50 per cent interest in OTP Geothermal.