Orica to Sell Ethane Pipeline
Orica Limited today announced that it had reached agreement to sell its Moomba to Botany ethane pipeline to a consortium for approximately $124 million.
The new owners will continue to transport ethane feedstock for the Qenos plant at Botany under the terms of a long term transportation contract.
Announcing the agreement, Orica's managing director and chief executive officer, Philip Weickhardt said: "We have made it clear for some time that the ethane pipeline was not a core asset for Orica and that we would sell it under the right conditions. We consider that we have now been able to strike an agreement that delivers the best result for our shareholders."
The consortium comprises UniSuper and National Australia Asset Management and was arranged by Access Capital Partners.
The 1375 km pipeline was commissioned in 1996 to transport ethane feedstock from the Moomba gas fields in South Australia's Cooper Basin to Orica's ethylene cracker at Botany in Sydney's southern suburbs. The cracker is now owned by Qenos, a joint venture between Orica (50%) and Exxon Mobil (50%).
The sale is targeted for completion in February 2000 and is subject to appropriate regulatory and third party consents. Proceeds will be used initially to retire debt. The transaction will be profit neutral for Orica.