AGL to cut its gas assets
ELECTRICITY big gun AGL will absorb more than $600 million in fresh writedowns and sell a swag of gas assets.
The electricity generator and retailer will hang the “for sale’’ sign on gas assets in Queensland, NSW and South Australia as it adjusts to a changing energy sector and uncertain future gas prices.
The company has also cancelled a stalled expansion of the Camden coal seam gas project south of Sydney.
But it will push ahead with its Gloucester Gas Project in the Hunter Valley.
New AGL chief Andy Vesey said it was important the contested development did not damage the company’s retail brand.
“This is always something we have to be attentive to, not only in development of upstream gas but in everything we do, to make sure we do things in the appropriate way,” he told analysts yesterday.
The US energy sector veteran unveiled a new strategic road map for the company in May heavily focused on solar power, home battery storage and smart meters.
AGL’s gas business will focus on a few core assets including its existing project at Camden and the Gloucester development, gas storage facilities in Queensland and NSW and a processing plant in Queensland.
Assets to be sold include coal seam gas exploration licences in the Hunter Valley separate from the Gloucester development and stakes in Queensland’s Spring Gully gas and Cooper oil project.
“We’re doing this against the backdrop of significant global uncertainty surrounding the long-term oil and gas prices,” Mr Vesey said.
“We’re just unwilling to tie up large amounts of capital for extended periods with relatively uncertain outcomes.”
AGL’s latest writedowns – linked to project delays and a fall in oil and gas prices – take its total pre-tax impairments to $803 million for the 2015 financial year. AGL shares closed 28. lower at $15.54.