APA to buy QCLNG pipeline

APA Group has announced it will acquire the QCLNG pipeline for approximately $6 billion.

The pipeline itself connects gas fields in the Surat Basin to LNG plants on Curtis Island, and intersects with APA Group's existing pipelines.

According to APA managing director Mick McCormack "the acquisition of the QCLNG pipeline allows APA to obtain exposure to the globally significant east coast LNG sector and expands APA's contract revenue base with revenue from highly creditworthy counterparties under 20 year take-or-pay contracts".

These parties are the BG Group and a China National Offshore Oil Corporation subsidiary.

The acquisition price of US$5 billion (roughly AUD$6 billion) represents a FY2016 EV/EBITDA multiple of approximately 13 times, and is operating cash flow per security accretive, in the order of 10%  from the first full year of ownership.

APA will seek to raise $1.839 billion through a fully underwritten pro-rata accelerated entitlement offer to partly fund the acquisition. 

"The acquisition of the QCLNG pipeline further enhances APA's position as Australia;s largest owner of gas transmission pipelines and builds on APA's strategy of expanding its revenue base and east coast grid."

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