Total signed an agreement to divest a 4 percent interest in the Ichthys liquefied natural gas (LNG) project in Australia to operating partner INPEX for an overall consideration of $1.6 billion, the energy giant announced Thursday.
The transaction, which is subject to Australian regulatory approvals, reduces Total's interest in the asset to 26 percent, while increasing INPEX's stake to 66.245 percent.
The remaining stakeholders are CPC Corporation, Taiwan (2.625 percent), Tokyo Gas (1.575 percent), Osaka Gas (1.2 percent), Kansai Electric Power (1.2 percent), JERA (0.735 percent) and Toho Gas (0.42 percent).
Located offshore Northwestern Australia, the Ichthys LNG project reached a major milestone on July 27 with the opening of the first offshore production well, marking the start of 40 years of operations of this gas and condensate field.
According to the statement, the Ichthys offshore facilities and the two-train onshore liquefaction plant will supply 8.9 million tons per year (Mt/y) of LNG and 1.65 Mt/y of liquefied petroleum gas (LPG), along with 100,000 barrels of condensate per day at full capacity.
The first LNG cargo was exported on Oct. 22, the first offshore condensate cargo was exported on Oct. 1, and the first LPG cargo was exported on Nov. 16, it said, adding the two LNG trains are now fully operational.
Arnaud Breuillac, president of exploration and production at Total, said this transaction was part of the company’s constant portfolio review to optimize its capital allocation.
"Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase. The final CAPEX estimate provided by the operator is around $45 billion to be compared to an updated figure around $40 billion in 2017," he said.
"In line with our capital discipline policy, we have therefore decided to control our capital employed in Ichthys by monetizing a 4 percent stake after the project startup and de-risking," he added.
Breuillac said Total would remain committed to the Ichthys project with its remaining 26 percent interest contributing to the company’s growth both in production and cash flow from 2019 and beyond.
"LNG is a core area for Total - the world second-largest privately owned player with a strong pipeline of low breakeven pre-FID [Final Investment Decision] projects in our portfolio," he added.
By Hale Turkes