Breaking News!!!!!!
Positive for Santos
GLNG sell-down tipped for Santos
A sell-down of Santos’s 33 per cent stake in the Gladstone LNG project is now seen as one of the most likely solutions to its funding woes.
The interest is currently worth $6.4bn, according to some analyst estimates, and divesting a sizable portion of that exposure to GLNG would help to reduce Santos’s $9bn worth of loans.
A sales process for the Adelaide-based oil and gas player’s West Australian assets is still progressing, as prospective suitors prepare to lob bids within the next fortnight ahead of final offers due in December.
It is believed PetroChina, which already has an exposure to the Browse Basin off the coast of WA, and Kufpec are interested in the West Australian projects.
However, that suite of projects consists of assets jointly owned with the Macquarie-backed Quadrant Energy, which has the first right to buy the Santos interests.
According to reports in The Wall Street Journal, a venture controlled by the Hong Kong commodity trader Noble Group and US private equity firm EIG Global Energy Partners are among the bidders in the Deutsche and Lazard-advised Santos sell off, with the highly sought-after $500m to $700m portfolio in Asia one point of focus.
This is through their jointly owned venture Harbour Energy, which is led by former Royal Dutch Shell veteran Linda Cook.
Meanwhile, the listed energy infrastructure owner APA is expected to be interested in buying one of the Origin Energy pipelines up for sale as part of its move to divest $800m worth of assets.
This comes as the DCM Review suggested investors holding Origin Energy Subordinated Notes would no doubt have been relieved following the release of details on Wednesday of the company’s $4.7bn of new capital initiatives.
After speculation in recent weeks around whether the notes will be called as scheduled on December 22, 2016, the company has all but confirmed that the notes will be redeemed.
This article first appeared in The Australian Business Review.
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