LNG Japan buys Tangguh LNG stake from BG

LNG Japan Corp. will acquire a 6.3% stake in the concession rights for a natural gas field development project in Indonesia's Tangguh region from BG Group Plc for roughly Y15 billion, the Nihon Keizai Shimbun reported in its Monday morning edition.

The 50-50 venture between Nissho Iwai-Nichimen Holdings' Nissho Iwai Corp. and Sumitomo Corp. already owns 1.1% of the project's concession rights. The firm, which currently handles about 85% of Indonesia's liquefied natural gas, or LNG, imports to Japan, is increasing its stake to raise its supply capacity, the Nikkei reported. Indonesia is the largest exporter of LNG to Japan.

BP Plc has led the development of the Tangguh natural gas field, which is expected to produce the equivalent of about 10 million tons of LNG per year beginning in 2007.

Mitsui & Co. had sought to purchase BG Group's 10.7% share of the Tangguh concession rights for around Y26 billion. But existing stakeholders LNG Japan and CNOOC Ltd. exercised their pre-emptive right to acquire the British firm's share. The Chinese concern will purchase the other 4.4% in concession rights.

The agreement will take effect pending approval by the Indonesian government and others.(*)