Total signed a deal to sell a 4 per cent interest in the Ichthys liquefied natural gas (LNG) project in Australia to operating partner INPEX for US$1.6 billion, as anticipated project cost rises.
The transaction, which is subject to Australian regulatory approvals, reduces Total’s interest in the asset to 26 per cent, Total said in a statement.
“This transaction is part of our constant portfolio review to optimise our capital allocation,” said Arnaud Breuillac, President, Exploration & Production at Total said. “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. In line with our capital discipline policy, we have therefore decided to control our capital employed in Ichthys by monetising a 4 per cent stake after the project start-up and de-risking,” Breuillac said.
“We are of course committed to the Ichthys project with our remaining 26 per cent interest contributing to our 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 projects in our portfolio.”
At full capacity, 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.
The first LNG cargo was exported on the October 22nd 2018, the first offshore condensate cargo was exported on October 1st 2018, and the first LPG cargo was exported on the November 16th 2018. The two LNG trains are now fully operational.