MELBOURNE (Reuters) - Origin Energy Ltd said on Friday it has agreed to sell a gas pipeline network in Australia for A$392 million ($291 million), helping it beat its target proceeds for asset sales to cut debt.
Origin is selling its Darling Downs pipeline network to Jemena Gas Pipelines, owned by State Grid Corp of China [STRGRD.UL] and Singapore Power.
The pipeline transports gas to Origin’s Darling Downs power station in Queensland state, the Australia Pacific LNG plant and the local market.
The price tag worked out to a 16.9 times multiple on the network’s forecast earnings for 2018, Origin said, and takes total asset sales to A$1 billion, well above the company’s target of A$800 million set out two years ago.
“We’re on track to achieve our target of adjusted net debt of well below A$9 billion by 30 June 2017,” Origin Chief Executive Frank Calabria said in a statement.
He added that the company was making good progress toward hiving off its gas fields this year.
The company is pushing toward an initial public offering of the business while weighing up offers from gas producers and other firms, people familiar with the process have said.
($1 = 1.3492 Australian dollars)
Reporting by Sonali Paul; Editing by Richard Pullin