Coronavirus fears rock Australian LNG asset sale

26 February 2020 - 12:00 am UTC

Shareholders in the Queensland Curtis LNG project are planning to launch an asset sale next month, as the coronavirus outbreak disrupts global markets. 

Shell and its partners in Queensland Curtis LNG are pressing on with an infrastructure sell-off amid fears the coronavirus is preventing the project’s largest customer from honouring its contracts.

A scoping study to nut out the structure of the sale and the assets involved is underway and will be handed to Shell in the next month as planned, said a source close to the process.

Once the sale process launches, investors will given further details on how to value the project, based on the tolls that users are charged for using the infrastructure and the credit quality of off takers China National Offshore Oil Corporation and Tokyo Gas.

Preparations remain on track even though CNOOC earlier this month refused to take LNG cargoes from Australia because the coronavirus outbreak is making it difficult to import the commodity.

One investor said they expected the sale to kick off in May, two months later than expected because the timing of the launch is complicated by the fallout over the coronavirus.

But a source familiar said the coronavirus would be a “temporary blip” and would not impact the value of the infrastructure, which three major LNG projects in Gladstone use, over the longer-term and therefore would not substantially impact the sale price.

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