French energy company Total SA (NYSE: TOT) said it has agreed to sell a 4% stake in its Australian Ichthys LNG project to Japanese partner Inpex Corp. for $1.6 billion, following cost overruns.
"This transaction is part of our constant portfolio review to optimize our capital allocation," Arnaud Breuillac, president of exploration and production at Total, said in a statement on Dec. 13. "Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase."
Breuillac, nevertheless, said Total remained committed to the Ichthys project and the French company would be holding on to its remaining 26% stake in Ichthys.
RELATED: Inpex Ships First LNG Cargo From Ichthys Project
Inpex has a majority stake of around 66% in the $40 billion project in northwestern Australia, which has seen multiple delays and significant cost overruns due to technical problems.
The project's other minority shareholders include CPC, Tokyo Gas Co. Ltd., Osaka Gas Co. Ltd., Kansai Electric Power Co., JERA Corp. and Toho Gas Co. Ltd.
RELATED: Total Wins Contracts For Two Offshore Blocks In Mauritania
At full operational capacity, Ichthys is expected to produce 8.9 million tonnes of LNG a year, along with about 1.7 million tonnes of LPG and about 100,000 barrels per day of condensate, an ultra-light form of crude oil.
Recommended Reading
Gunvor Group Inks Purchase Agreement with Texas LNG Brownsville
2024-03-19 - The agreement with Texas LNG Brownsville calls for a 20-year free on-board sale and purchase agreement of 0.5 million tonnes per annum of LNG for a Gunvor Group subsidiary.
Venture Global, Grain LNG Ink Deal to Provide LNG to UK
2024-02-05 - Under the agreement, Venture Global will have the ability to access 3 million tonnes per annum of LNG storage and regasification capacity at the Isle of Grain LNG terminal.
Cheniere, Cheniere Energy Partners Uplisted to NYSE
2024-01-31 - LNG producing companies Cheniere Energy and Cheniere Energy Partners are to begin trading on the New York Stock Exchange on Feb. 5.
Sempra Targets Summer 2025 for Commercial Start of ECA LNG Phase 1
2024-03-06 - Sempra is targeting the summer of 2025 as the commercial operations date for its 3.25 mtpa (0.43 Bcf/d) nameplate capacity Energía Costa Azul LNG Phase 1 project, located in Ensenada in Baja California, Mexico.
NextDecade Targets Second Half of 2024 for Phase 2 FID at Rio Grande LNG
2024-03-13 - NextDecade updated its progress on Phase 1 of the Rio Grande LNG facility and said it is targeting a final investment decision on two additional trains in the second half of 2024.