Origin Energy (Origin), an Australian integrated energy company, has sold Mortlake Terminal Station to AusNet Services, the largest diversified energy network business in Victoria, for A$110 million (€70.1 million; $78.6 million).
Mortlake Terminal Station, which is currently operated and maintained by AusNet Services, connects Origin’s gas-fired Mortlake Power Station to Victoria’s electricity market via a 500-kilovolt transmission line.
The deal is part of a broader asset divestment programme announced by Origin last September through which it aims to raise A$800 million. The transaction brings Origin a pre-tax gain of about A$25 million.
Companies including APA Group, Cheung Kong, QIC, REST Super, AMP Capital and Colonial First State are eyeing various assets currently held by Origin, according to local press reports.
Under the terms of the transaction, Origin will enter into a long-term agreement with AusNet Services to continue to connect Mortlake Power Station to the Victorian grid. The arrangement is expected to increase AusNet Services’ cash inflows by A$8.8 million in 2018, being the first full-year contribution.
“The sale of Mortlake Terminal Station demonstrates progress against our stated intention to generate A$800 million through asset divestments including non-operated upstream interests, direct investments in wind generation and infrastructure assets,” said Grant King, Origin’s managing director.
“The acquisition represents a further step in our strategy to prudently grow our contracted asset base. Providing infrastructure services, such as these, which are closely aligned to our core capabilities and generating attractive long-term returns, is an exciting opportunity,” said Nino Ficca, AusNet Services’ managing director, adding that the company will use existing corporate debt facilities to fund the acquisition.
Headquartered in Melbourne, AusNet Services owns and operates more than A$11 billion of electricity and gas distribution assets.
Apart from the 6 gigawatts of contracted capacity it owns, Origin has interests in energy retailing and natural gas production. It is developing the Australia Pacific liquefied natural gas facility in partnership with ConocoPhillips and Sinopec.
The deal is expected to complete by 30 June 2016.