Oil and gas exploration giant Total has confirmed that it will reduce its interest in the Ichthys liquefied natural gas (LNG) project in Australia.
The firm said it would divest a 4% stake to operating partner Inpex for more than £1.2 billion.
The transaction, which is subject to Australian regulatory approvals, reduces Total’s interest in the asset to 26%.
Arnaud Breuillac, president of exploration and production at Total, said: “This transaction is part of our constant portfolio review to optimize our capital allocation. Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase.
“The final CAPEX estimate provided by the Operator is around 45 B$ to be compared to an updated figure around 40 B$ in 2017. In line with our capital discipline policy, we have therefore decided to control our capital employed in Ichthys by monetizing a 4% stake after the project start-up and de-risking.
“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.”
The Ichthys offshore facilities and the two-train onshore liquefaction plant will supply 8.9 million tons per year (Mt/y) of LNG and 1.65 Mt/y of liquefied petroleum gas (LPG), along with 100,000 barrels of condensate per day.