Rio Tinto has completed a wharf and land sale to joint venture group LNG Canada for $US576 million ($797 million).
The companies entered into an option agreement for the lease and purchase of the land, in Kitimat, British Columbia (BC), in February 2014.
LNG Canada is constructing a replacement wharf for the shipment of Rio Tinto aluminium exports from its Terminal A smelter in BC. The construction is valued at around $150 million and is expected to be completed by the third quarter of 2020.
The group also intends to develop a large-scale 14 million tonne a year liquefied natural gas (LNG) export facility at Kitimat that has been cited by LNG Canada as one of Canada’s largest energy investments.
In return for its extension works at Terminal A, LNG will receive Terminal B, which is located near the export facility’s build location.
LNG Canada is a JV between several major oil and gas and petrochemical companies, including Shell, Petronas, PetroChina, Mitsubishi-affiliated Diamond LNG and Kogas.
Rio has also finalised a share buyback plan, achieving its purchase target of 41.2 million shares in an off-market buyback worth nearly $US2.1 billion ($2.9 billion).
This represented just under 10 per cent of Rio Tinto Ltd shares, or 2.41 per cent of overall Rio Tinto Group ordinary shares. Company cash returns to shareholders in 2018 stand at $6.4 billion.
The $US2.1 billion is part of a larger $3.2 billion share buyback plan announced in September. The remaining $US1.1 billion will be returned through an on-market buyback set to commence on February 28 next year.
Rio will return the sum to Rio Tinto’s shareholders at a 14 per cent discount, according to chief executive officer Jean-Sébastien Jacques.