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Pipeline bigwigs to clash at Origin's Darling Downs


Source: Financial Review 7/02/17 

Origin Energy's Darling Downs Pipelines auction shapes as a showdown between $9.5 billion pipelines heavyweight APA Group and State Grid Corporation of China and Singapore Power-backed Jemena. It is understood Origin ushered shortlisted parties through to the auction's second stage on Monday, telling bidders that binding offers would be due in 10 weeks after formal management meetings and due diligence. 

Sources said APA headed into the second and final phase as the most likely acquirer, given its extensive experience and network of similar gas pipelines across the country. Although APA, advised by Morgan Stanley, is expected to be in for a fight. UBS-advised Jemena, which beat APA for a contract to build, own and operate the Northern Territory's $800 million Northern Gas Pipeline, is in the mix, along with a small handful of other pipeline and infrastructure players. 

Perhaps the most interesting player is DUET Group, which is under offer from Cheung Kong Infrastructure Holdings and some of its related entities.While both camps have plenty on their plates, Origin's pipelines would be an easy first win for the incoming owner or a good backup plan for DUET in case the deal were to fall over.

It's understood Origin will open the second-stage dataroom for bidders this week.Up for grabs are three separate high pressure gas pipelines that service some of the Origin-backed APLNG's upstream gas fields in the Surat Basin and Origin's Darling Downs Power Station.The pipelines have a total length of 292 kilometres and are expected to be worth $300 million to $400 million.

Origin operates and maintains the pipelines but that is expected to end should another operator - such as APA - win the auction. It's the fifth and final leg of Origin's infrastructure asset sale program and is expected to be completed by the end of the financial year.