French energy company Total said it has agreed to sell a 4 percent stake in its Australian Ichthys liquefied natural gas (LNG) project to Japanese partner Inpex for $1.6 billion, following cost overruns.
"This transaction is part of our constant portfolio review to optimize our capital allocation," Arnaud Breuillac, president of exploration and production at Total, said in a statement on Thursday. "Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase."
Breuillac, nevertheless, said Total remained committed to the Ichthys project and the French company would be holding on to its remaining 26 percent stake in Ichthys.
Inpex has a majority stake of around 66 percent in the $40 billion project in northwestern Australia, which has seen multiple delays and significant cost overruns due to technical problems.
The project's other minority shareholders include CPC, Tokyo Gas, Osaka Gas, Kansai Electric, JERA Corp and Toho Gas.
At full operational capacity, Ichthys is expected to produce 8.9 million tonnes of LNG a year, along with about 1.7 million tonnes of LPG and about 100,000 barrels per day of condensate, an ultra-light form of crude oil.
(Reporting by Sudip Kar-Gupta; Editing by Susan Fenton)