Mitsubishi Corp acquires 16.3 percent stake in Tangguh LNG project

Mitsubishi Corp.said Wednesday it acquired Occidental Berau of Indonesia LLC, a unit of US based Occidental Petroleum Corp for Y60 billion, giving it a 16.3 percent stake in the Tangguh LNG project in Irian Jaya.

Tangguh, covering three areas - Berau, Muturi and Wirigar, is located in the northwest part of Irian Jaya, Indonesia. Occidental Berau has a stake in the Berau block.

The share transaction made the Japanese trading giant the second largest equity holder in the Tangguh LNG project after BP PLC, which has a 50 percent stake.

BP previously announced on July 6 that it had increased its share of Tangguh from 40 percent to 50 percent through the acquisition of Cairns Ltd.

Participation in the Tangguh project increased Mitsubishi-held natural gas and crude oil reserves, based on its equity holdings, by 33 percent to an equivalent of 1.6 billion barrels of crude oil from 1.2 billion barrels, the company said in a statement.

Indonesia's state-owned oil and gas concern, Pertamina has said it is considering development of Tangguh as its third LNG export center after the Bontang and Arun gas fields.

The first and second LNG processing plants at Tangguh, each with capacity of 3 million to 3.5 million metric tons a year, are scheduled to come onstream in 2006.

An international tender will be opened in the second half of this year for construction of the processing plants, or trains, Mitsubishi said.

Meanwhile, Bill Schrader, BP Associates President, Indonesia, said ?We are pleased to have Mitsubishi join us on Tangguh. As partnership, we are working towards the earliest possible development and Mitsubishi?s presence can only further enhance confidence in Tangguh?s gas marketing success in Japan, as well as in China and Korea where we have registered much interest in this world class gas field.?

Tangguh is a world-class gas field in Indonesia, with proved reserves certified at 14.4 trillion cubic feet. The Tangguh reserves are located on three production-sharing contracts (PSCs). BP holds an interest on all three of the PSCs, on two of which it is operator.

The shares in proved reserves in the Tangguh project, derived from the three PSCs are: BP 50 percent, Mitsubishi 16 percent, Nippon 12 percent, BG 11 percent, KG (Kanematsu Corp) 10 percent, and Nissho Iwai 1 percent. (Alex)