Oz AGL Abandons Sale of Queensland Assets

Australian gas retailer AGL Energy January 31 announced that it has terminated its agreement to sell its north Queensland gas assets to Order Moranbah Holdings originally announced in August 2017.

“Certain conditions precedent to the sale were unable to be satisfied to secure counter-party support for the sale to proceed,” it said.

Order Moranbah is a consortium of Chinese gas distribution company, Shandong, and Australian energy investment company, Orient Energy.

The north Queensland gas assets comprise AGL’s 50% interest in the Moranbah Gas Project Joint Venture (MGPJV) and the North Queensland Energy Joint Venture (NQEJV), as well as AGL's participation rights in the ATP1103 exploration permit located in the Bowen Basin. Arrow Energy, through its subsidiaries, is the joint venture partner in each of these assets.

AGL announced in February 2016 that it intended to exit the exploration and production of natural gas. At the time, it announced an impairment charge of A$640mn (US$505.75mn) after tax (A$795mn pre-tax) against the carrying value of its gas exploration and production assets, and cited volatility in commodity prices and long development lead times as the reasons for its decision to exit.