MidOcean to acquire Tokyo Gas’ interests in four Aussie LNG Projects

R. Blair Thomas, Chairman and Chief Executive Officer at EIG

MidOcean Energy (MidOcean), an LNG company managed by EIG, an investor in energy and infrastructure sectors, announced that it has entered into a definitive agreement with Tokyo Gas Co., Ltd to acquire Tokyo Gas’ interests in four Australian integrated LNG projects.

What do the LNG projects mean for MidOcean’s portfolio?

Under the terms, MidOcean will acquire Tokyo Gas’ interests in Gorgon LNG, Ichthys LNG, Pluto LNG and Queensland Curtis LNG for total cash consideration of US$2.15 billion.

These integrated projects span Australia’s western and eastern seaboard and are major suppliers of LNG to Asia, with a diverse set of long-dated take or pay contracts with investment grade counterparties, and to Australia’s domestic gas markets. The portfolio is expected to generate approximately 1 million tonnes per annum of LNG net to MidOcean, production that is underpinned by long-life reserves and a globally competitive cost structure.

The portfolio benefits from top operators, like Chevron, INPEX, Woodside and Shell, and spans the LNG value chain from upstream operations to midstream, liquefaction and sales.

The acquisition marks the launch of MidOcean’s strategy to build a high-quality, diversified, global ‘pure play’ integrated LNG company and leverages EIG’s extensive investing experience in the global LNG sector, underpinned by several billion dollars of commitments to multiple LNG projects over the past 20 years, most recently including the acquisition of a controlling interest in GNL Quintero S.A., the largest LNG regasification terminal in Chile.

The deal is also in-line with the Tokyo Gas Group’s Management Vision, “Compass 2030”, where Tokyo Gas continues to show leadership in the transition to Net-Zero CO2 emissions.

What were the executives’ thoughts on the transaction?

R. Blair Thomas, EIG’s Chairman and CEO, said, “The launch of MidOcean reflects our deep belief in LNG as a critical enabler of the energy transition and the growing importance of LNG as a strategic energy resource. We believe this deal provides MidOcean with a foundational portfolio of cost-advantaged integrated LNG assets in a low-risk jurisdiction, ideally positioned to supply key clients in Japan, Asia and across the globe for decades to come.”

In June 2022, EIG announced that LNG veteran De la Rey Venter, formerly with Shell, joined MidOcean as Chief Executive Officer, bringing 25 years of experience in global LNG operating, dealmaking and business leadership. Mr. Venter commented, “With today’s announcement, MidOcean is taking the first step toward realizing its vision to build a material pure play LNG business that we expect will support the world’s transition to a Net Zero future.”

De la Rey Venter, Chief Executive Officer at MidOcean Energy

“We see a number of opportunities to further expand MidOcean’s position in supplying LNG markets worldwide and look forward to working with our new partners and customers.”

The transaction is expected to close in first half of 2023, subject to customary closing conditions, such as Australian regulatory approvals. Barrenjoey, Barclays and JP Morgan acted as EIG’s financial advisors in this deal and White & Case acted as EIG’s legal advisor.