LNG Japan to buy 5 percent stake in RI’s gas field: Report

LNG Japan Corp. decided to acquire about a 5% stake in a gas field development project in the Indonesian region of Tangguh at a cost of around Y13 billion, in addition to the 1% it already has, The Nihon Keizai Shimbun newspaper reported on Monday.

The acquisition will come from buying a portion of a 10.7% share estimated to be worth about Y26 billion that BG Group (BG), formerly British Gas Plc, is selling.

The final stake of LNG Japan, a 50-50 liquefied natural gas joint venture between Nissho Iwai Corp and Sumitomo Corp, will be determined in negotiations with China National Offshore Oil Corporation (CNOOC), another party reportedly interested in acquiring BG Group's share.

The Tangguh gas field, located in Papua province, has been developed under the lead of BP Plc at an estimated total cost of US$3.7 billion. It is expected to become one of the world's biggest LNG fields when it begins producing some 10 million tons a year in 2007.

Tangguh gas field has 14.4 TCF proven natural gas reserves and probable reserves 3.9 TCF.

Among Japanese companies, Mitsubishi Corp and Nippon Oil Corp are also participating in the project. LNG Japan has decided to increase its stake because it believes demand for LNG will grow solidly in Japan and China. (*)