London — Total has signed a deal to sell 4% of its stake in the Australian Ichthys LNG export project to Japanese operator INPEX for $1.6 billion, the French company said Thursday.
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The transaction, which is subject to Australian regulatory approvals, reduces Total's interest in the asset to 26%.
Total said the move is line with its capital discipline policy, as the final capex estimate provided by the operator rose $5 billion from last year to about $45 billion for 2018.
"This transaction is part of our constant portfolio review to optimize our capital allocation," said Arnaud Breuillac, President, Exploration & Production at Total. "Ichthys is part of a wave of Australian LNG projects which have unfortunately experienced major cost overruns and delays during their construction phase."
"We are of course committed to the Ichthys project with our remaining 26% interest contributing to our growth both in production and cash flow from 2019 and beyond. LNG is a core area for Total - the world second-largest privately owned player with a strong pipeline of low breakeven pre-FID projects in our portfolio," he said.
Once fully operational, the Ichthys offshore facilities and the two-train onshore liquefaction plant will have capacity of 8.9 million mt/year of LNG. The two LNG trains are now fully operational. The first LNG cargo was shipped from the terminal on October 22, to the Naoetsu LNG terminal in Japan's Niigata Prefecture.
Total also has a 20% interest in the $27 billion Russian Yamal LNG export project, which reached full capacity of 16.5 million mt/year this week.
Its portfolio also includes participating interests in liquefaction plants, notably in the Cameron LNG project in the US, long-term LNG sales and purchase agreements, an LNG tanker fleet as well as access to regasification capacities in Europe.
Total aims to manage a 40 million mt/year of LNG volume by 2020, it says in its website. It also targets a liquefaction capacity portfolio of 23 million mt/year by 2020, spread across the Middle East, Australia, Russia and the US.
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