ConocoPhillips and Origin Energy Ltd. (ORG) are working with JPMorgan Chase & Co. (JPM:US) to help sell a stake in their $20 billion natural gas project in Australia, according to three people with knowledge of the matter.
The energy companies are seeking to sell 15 percent of the liquefied natural gas venture, which may draw interest from Asian buyers, said one of the people, who declined to be identified as the details are private. The stake may be worth as much as $3 billion, another person said.
ConocoPhillips and Origin last month approved the second phase of the Australia Pacific LNG project in Queensland state which is scheduled to start exports to Asia in mid-2015. Sydney- based Origin said July 4 it plans to cut its stake to 30 percent from 37.5 percent. Houston-based ConocoPhillips (COP:US) also holds 37.5 percent and is selling down to 30 percent, the person said.
The project is among about A$200 billion in LNG developments under construction in Australia to tap Asian demand for cleaner-burning fuel, according to data from the Australian Petroleum Production & Exploration Association. It is one of three coal-seam gas-to-LNG projects being built in Queensland alongside developments led by Reading, England-based BG Group Plc (BG/) and Santos Ltd. (STO) A fourth is being proposed by Royal Dutch Shell Plc (RDSA) and PetroChina Co.
Origin and ConocoPhillips are close to hiring an investment bank and are in the final stages of discussions, Anneliis Allen, a Sydney-based spokeswoman for Origin, said by phone today. ConocoPhillips spokesman John McLemore declined to comment, as did Noelle Waugh, a spokeswoman for JPMorgan.
China Petrochemical Corp., or Sinopec Group, will pay a total of $2.1 billion, including its share of capital spending for the LNG project, to raise its stake in the venture to 25 percent from 15 percent, Origin said in a July 12 statement. In May Origin and ConocoPhillips obtained $8.5 billion in loans from banks and export credit agencies.
ConocoPhillips reiterated the $20 billion cost estimate in a July 4 statement.
Origin’s remaining funding requirements for its share of the project through first production of both units is about A$3.6 billion, the company said July 4. Managing Director Grant King said earlier this year said that options to pay for the second phase of the project included selling shares.
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