BG Said to Work With Goldman Sachs on Sale of Australian AssetsBrett Foley and Elffie Chew
BG Group Plc, the U.K.’s third-largest oil and natural gas producer, is working with Goldman Sachs Group Inc. as it considers selling pipelines and other equipment at its Australian liquefied natural gas project, said two people with knowledge of the matter.
BG is studying the sale of assets around the plant on Curtis Island in Queensland state, the people said, asking not to be identified as the details are private. The infrastructure around the project includes a 540-kilometer (336-mile) pipeline to carry coal seam gas from Surat Basin to the processing plant.
The Reading, U.K.-based explorer is trying to balance record capital spending on fields from Australia to Brazil with lower-than-expected oil and gas production. The company this month said it is targeting $8.1 billion of asset sales by the end of 2013.
A spokesman at QGC, BG’s Brisbane-based unit, referred questions to the company’s headquarters in London. Hayley Morris, a spokeswoman for Goldman Sachs in Sydney, declined to comment.
BG plans to build two processing units at the plant near Curtis Island, more than 300 kilometers north of Brisbane, with a combined capacity of 8.5 million metric tons of LNG a year. The facility is due to start fuel shipments next year, the company has said.
BG said in May the cost for building the project, which will convert coal-seam gas to LNG for shipment to overseas markets, had jumped 36 percent to $20.4 billion because of gains in the Australian dollar and rising labor expenses.
China National Offshore Oil Corp. in November agreed to pay $1.93 billion to increase its stake in the LNG project to 50 percent from 10 percent. The deal also included a contract for BG to supply the Chinese company with 5 million metric tons a year of LNG for 20 years, starting in 2015.