Back in December BG Group, which operates a two-train liquefied natural gas (LNG) export facility at Gladstone in Queensland, announced the sale of what it considered a non-core infrastructure asset. The asset is the 543km underground pipeline network linking BG's natural gas fields in southern Queensland with Gladstone.
The acquirer was the ASX-listed gas infrastructure business APA Group (ASX: APA) for US$5 billion. The price was a significant premium to the book value of US$1.6 billion but included fixed tariffs for ongoing use of the pipeline.
With the oil price continuing to languish, there have been plenty of reports and suggestions that energy giants Santos Ltd (ASX: STO) and Origin Energy Ltd (ASX: ORG) may be under some funding and balance sheet pressures.
This was arguably confirmed in February when the CEO of Santos acknowledged that Goldman Sachs had been hired to advise on a sale of Santos' 420km GLNG pipeline.
Meanwhile, there's a similar story at Origin Energy, where the APLNG Project is just months away from entering production mode with first gas having travelled along its 530km pipeline from Queensland's Surat Basin to the group's LNG facility on Curtis Island.
Origin looks to be equally keen to offload its pipeline asset with DUET Group (ASX: DUE) amongst potential suitors believed to be running the ruler over the infrastructure.
Like BG Group, Santos and Origin are both looking at multi-billion dollar windfalls from the sale of their respective pipelines.
While this will increase the ongoing operating costs for their LNG projects as they will have to pay any new owners for access to the critically important pipeline, the benefit is that it may reduce any strain that their balance sheets are under.
In essence, it could provide some breathing room until their LNG projects enter full production and start throwing off the much heralded mountains of cash flow which management and investors are expecting.
