French energy company Total SA (NYSE: TOT) said it has agreed to sell a 4% stake in its Australian Ichthys LNG project to Japanese partner Inpex Corp. 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 Dec. 13. "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% stake in Ichthys.

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Inpex has a majority stake of around 66% 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 Co. Ltd., Osaka Gas Co. Ltd., Kansai Electric Power Co., JERA Corp. and Toho Gas Co. Ltd.

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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.