Origin to sell Contact stake

OREANDA-NEWS. Australian utility Origin Energy plans to sell its 53.09pc stake in New Zealand counterpart Contact Energy to institutional investors for NZ\\$1.8bn (\\$1.2bn).

Origin will use the money to pay down debt to strengthen its balance sheet, which has been stretched by its involvement in the 9mn t/yr Australia Pacific LNG (APLNG) project at Gladstone, Queensland.

It bought the stake in Contact in 2004 from US firm Edison Mission Energy, but failed in its bid to buy all of the shares in the New Zealand firm.

Contact operates in the competitive generation and retail segments of the New Zealand energy market. It is the second-largest electricity producer in the country and generates about 22pc of New Zealand's electricity. It also sells LPG in New Zealand. It sold 73,302t of LPG in the 2014-15 fiscal year to 30 June, up from 68,438t the previous year.

Origin owns 37.5pc of APLNG, the same size stake that ConocoPhillips holds in the A\\$24.7bn (\\$19bn) venture. Chinese state-controlled oil firm Sinopec owns 25pc. The project is on track for sustained production from its first train in the second quarter of 2015-16.