AGL Energy to Sell Gas Assets to Chinese-Australian Consortium

By Robb M. Stewart Features Dow Jones Newswires

MELBOURNE, Australia--Australian utility AGL Energy Ltd. (AGL.AU) said it has agreed to sell a number of natural-gas assets in the country's northeast to a Chinese-Australian consortium, part of its efforts to exit gas exploration and production.

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The assets, which include 50% stakes in the Moranbah gas project and North Queensland Energy joint venture, as well as rights to an exploration license in the Bowen Basin, will be bought by Chinese gas-distribution company Shandong Order Gas Co. and energy investment company Orient Energy Pty. Ltd., AGL said Friday.

Financial terms of the deal weren't disclosed, but AGL said it doesn't anticipate any further impairments on the carrying value of the assets.

The planned sale follows AGL's decision early last year to exit natural gas, to focus on commercial and retail energy sales. AGL, one of the country's oldest companies which traces its roots to 1837 and a firm responsible for introducing gas lighting to Sydney, operates an extensive electricity-generation portfolio.

The Moranbah gas project venture comprises producing fields near Moranbah in the north of Queensland state and associated sales contracts, while the North Queensland Energy venture includes transport rights on a gas pipeline, a power-purchase agreement to run gas through the Yabulu power station and gas sales agreements.

Arrow Energy Ltd.--jointly owned by Royal Dutch Shell PLC and PetroChina--is the venture partner in each of the assets being sold by AGL, and has pre-emptive rights over any deal. If Arrow doesn't take up its rights, the deal with the consortium is subject to regulatory approval in Australia and China, AGL said.

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Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

August 24, 2017 20:33 ET (00:33 GMT)