Brookfield Renewable Partners and EIG Partners have entered into a “binding” agreement to buy 100 percent of Origin Energy’s shares, valued at AUD 18.7 billion, both said on Monday.
Canadian company Brookfield “will own Origin’s Energy Markets business, Australia’s largest integrated power generator and energy retailer”. Meanwhile, US-based EIG’s MidOcean Energy “will separately own Origin’s Integrated Gas segment, including its upstream gas interests and 27.5 percent stake in Australia Pacific LNG (APLNG) “, said a joint press release.
MidOcean has signed another deal to sell a 2.49 percent stake in APLNG to ConocoPhillips, which already owns 47.5 percent of APLNG.
The acquisition is still subject to approval by Origin shareholders and regulatory clearances. The works council has already recommended that shareholders vote in favor of the sale in the absence of a better proposal, according to the announcement.
Brookfield and EIG, which will manage Origin through a consortium, noted that the Australian utility has a 24 percent market share of the domestic electricity market.
Meanwhile, APLNG is “ideally positioned to supply key customers in the Asia-Pacific region and around the world,” having attracted around $30 billion in capital investment in gas reserves and downstream processing from its launch, according to the release.
Focus on the energy transition
Brookfield and EIG called the acquisition a “landmark transaction” for Australia’s emissions reduction target. The country has pledged to cut emissions up to 43 percent below 2005 levels on the way to net zero by 2050.
“Both parties intend to use the acquisition to create separate platforms that will assist Australia’s transition to a net zero future,” the statement said.
Toronto-based Brookfield plans to invest at least AUD$20 billion over the next decade to build renewable plants and storage facilities with a total capacity of 14 gigawatts.
“This is expected to enable the decommissioning of one of Australia’s largest coal-fired power stations, Eraring, and will be undertaken with the utmost regard for grid reliability and security,” he said. say the statement
Brookfield’s planned investment in renewables includes around one-fifth of the utility-scale renewable capacity identified by Australia’s energy market operator to be realized by 2030.
“Origin Energy Markets’ existing 3.1GW fleet of gas-fired generation and pumped hydro storage provides reliable capacity during peak periods and times when renewable generation is intermittent,” the statement said.
Brookfield is also working with Reliance Industries to explore renewable energy collaboration “in the context of the transaction.”
“MidOcean recognizes that LNG and natural gas are an integral part of the Asian and Australian economies and is committed to continuing to deliver significant volumes of gas to the domestic east coast market of Australia in support of businesses and households locals”, adds the statement.
Mark Carney, Brookfield’s president of asset management and transition investing, commented: “As the energy transition accelerates, what is needed is increasingly clear: faster deployment of large-scale renewables scale, the accelerated and responsible retirement of coal generation and an interim support intervention. role of gas as a reliable backup fuel.”
Brookfield Asia-Pacific chief executive Stewart Upson said: “We will build on the success of our global renewable energy and transition business where we have a mandate to ‘go where emissions are’ to put thousands of million dollars behind an executable plan to reduce emissions. at the Origin”.
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