The sale is part of AGL’s strategy to quit the exploration and production of natural gas, owing to the decline in global oil prices.
Financial terms of the sale have not been disclosed yet by the parties though AGL said that it will provide more details of the outcome of the sale once it reaches a financial close.
The assets which will be divested include AGL’s 50% stake in both the Moranbah Gas Project Joint Venture (MGPJV) and the North Queensland Energy Joint Venture (NQEJV).
It would also include the Australian energy developer’s participation rights in the ATP1103 exploration licence contained in the Bowen Basin.
Included in the sale of AGL’s interest in MGPJV are gas producing fields near Moranbah and associated gas sales contracts. The NQEJV on the other hand includes transportation rights on the North Queensland gas pipeline, a power purchase agreement to charge for the gas through the 243MW Townsville Power Station in Yabulu along with gas purchase and sale agreements.
The sale agreement made by AGL with the Chinese-Australian consortium will be based on the pre-emptive rights Arrow Energy has over the MGPJV and NQEJV assets. Arrow Energy is AGL’s joint venture partner in MGPJV, NQEJV and also in the ATP1103 assets.
In case of Arrow declining to exercise its pre-emptive rights, then AGL’s sale of the assets will be subject to approval from Australian and Chinese regulators. Apart from that, the divestiture would also need consents from joint venture counterparties in such case, stated AGL.
