The transaction means that APT now has full ownership of the 840km pipeline which links the Ballera gas fields in south-west Queensland to the WMC Fertilisers Phosphate Hill operations, BHP Billiton’s Cannington mine, Xstrata’s Mt Isa mine and CS Energy’s Mica Creek power station near Mt Isa.

The CGP is currently the only source of gas supply to the minerals-rich Carpentaria region and is an essential piece of infrastructure, according to APT.

“The acquisition of the remaining 30% ownership in the pipeline is consistent with APT’s strategy of acquiring minority interests in our existing pipelines,” said APT managing director Jim McDonald.

“The sale will be funded from existing debt facilities and results in a gearing level of approximately 65%. The acquisition will be cash flow and earnings per unit accretive from year one. This transaction, combined with our recent acquisition of the SCP Group pipeline assets in Western Australia further diversifies our portfolio of pipelines in our overall revenue mix.”

APT and the producers have also agreed to hold future discussions concerning a new delivery point into the CGP which may assist in commercialising a number of smaller gas fields to the north of the Ballera gas plant.

Delhi Petroleum currently has a 6.96% stake in the pipeline, while Origin has a 5.02% interest.

Santos’ interest in the CGP is 18.02% and its share of the total cash consideration is A$59 million. This is expected to result in Santos being able to book a profit in the current financial year ending 31 December 2004.

“This sale represents a continuation of Santos’ strategy to dispose of non core assets said Santos’ managing director, John Ellice-Flint.

“Notwithstanding the sale, Santos will continue to maintain a close relationship with APT on the CGP and in other APT gas pipelines transporting gas produced by Santos.”