CLP to sell Australia’s Iona Gas facility for $1.28bn

Hong Kong-based power company CLP has signed an agreement to sell EnergyAustralia’s entire interests in the Iona Gas Plant in Victoria, Australia to a consortium led by investment firm QIC for A$1.78bn ($1.28bn).

The consortium consists of the QIC Global Infrastructure Fund (QGIF) and existing QIC clients.

QGIF head Ross Israel said: "I’m delighted that we have been able to achieve this outcome for our clients and QGIF, our pooled global infrastructure fund.

"For QGIF, it builds on the successful first close achieved on 4 August 2015.

Located west of Melbourne, the Iona facility provides essential storage facilities to domestic integrated utilities to service intermediate and peak gas demand.

The first underground natural gas storage facility in Australia, Iona has a storage capacity of 23.5 petajoules and has long term contracts with major integrated gas and electricity providers.

The plant supplies gas and generation of electricity to customers in Victoria, South Australia as well as up the east coast of Australia.

CLP CEO Richard Lancaster said: "The sale is consistent with CLP’s strategy of restoring value to the business in Australia and EnergyAustralia’s approach of increasing its focus on customers, improving operational efficiency and optimising its portfolio of assets."

EnergyAustralia is set to sign a gas storage services agreement with the purchasers in a bid to supply gas to its customers.

The sale, which is conditional upon receipt of certain regulatory approvals, is expected to be completed by the year end.