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Total sells 4% stake in Ichthys LNG project to Inpex for $1.6B

French oil major TOTAL SA announced Dec. 13 that it will sell a 4% interest in the Ichthys LNG project offshore western Australia to Inpex Corp. for US$1.6 billion.

The operator, Inpex, expects the project's production to plateau at approximately 8.9 million tons of LNG per year, equivalent to more than 10% of Japan's LNG import volumes.

Total President of Exploration and Production Arnaud Breuillac cited concerns about rising costs for the decision to reduce the company's stake in the project to 26%, saying the latest cost estimate provided by Inpex increased to approximately US$45 billion from around US$40 billion in 2017.

"The transaction is part of our constant portfolio review to optimize our capital allocation," Breuillac said. "Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase. ... In line with our capital discipline policy, we have therefore decided to control our capital employed by Ichthys by monetizing a 4% stake after the project start-up and de-risking."

Inpex said that the deal, subject to conditions including the Australian government's approval, will have a minimal impact on its consolidated financial results.

Currently, the Ichthys LNG project is operated by Inpex, which holds a 62.245% stake. Total holds a 30% stake while CPC Corp. Taiwan, Tokyo Gas Co. Ltd., Osaka Gas Co. Ltd., Kansai Electric Power Co., JERA Co. Inc. and Toho Gas Co. Ltd. own interests of 2.625%, 1.575%, 1.2%, 1.2%, 0.735% and 0.42%, respectively.