Itochu in LPG JV with Pertamina, US companies: Report

Trading house Itochu Corp. said Tuesday it has signed a basic agreement with state-owned oil and gas company Pertamina and three U.S. oil companies to form a joint venture company for production of liquefied petroleum gas (LPG) from natural gas produced in southern Sumatra, the Kyodo news service reported.

The joint venture plans to begin producing LPG at an annual rate of around 550,000 tons in 2004, boosting the production to 1 million tons in 2006, it said, Kyodo reported.

All output will be exported to Japan and the joint company will also produce light naphtha.

Itochu will spend some $20 million for a 20 percent equity stake in the joint venture, which will be also 20 percent owned each by Pertamina, Devon Energy Corp. ( DVN), Amerada Hess Corp. (AHC) and Kerr-McGee Corp. (KMG). (*)