Origin to sell $1.2-billion Contact stake
MELBOURNE, August 4, 2015 – Australian company Origin Energy announced on Tuesday it would sell its controlling stake in Contact Energy, a New Zealand power generation company, for about $1.2 billion in a bid to pay back its own debts.
Origin has invested $18 billion in the Australia-Pacific LNG project in Queensland state to supply natural gas to the Asian market by extracting and liquefying Australian coal bed methane. One of four LNG projects carried out in the country, the Australia-Pacific project will have two trains, each with a capacity of 4.5 million tonnes per year.
As low crude oil prices have stretched Origin’s budget and have made cost blowouts from the company’s LNG development project worse, divesting from Contact will allow the company more financial flexibility.
“Today’s announcement is consistent with Origin’s stated intention to continue to take action to reduce operating and capital costs, realign debt across group entities, and, where appropriate, divest assets,” Origin managing director Grant King said in a company statement on Tuesday.
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